marketing

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MARKETING PLAN AND STRATEGY OF NESTLE

Nestle is the leading FMCG company of Switzerland established by Henri Nestle. Nestle is serving worldwide with its more than 500 factories in 86 countries comprising almost all continents. Nestlé’s product portfolio is more than 500 products all over the world serving best to their customers. Henri Nestlé endowed his company with the symbol derived from his name. His family coat of arms, the nest with a mother bird protecting her young, became the Company's logo and a symbol of the Company's care and attitude to life-long nutrition. The Nestlé nest represents the nourishment, security and sense of family that are so essential to life

The first product made by Henri Nestlé, a food for babies who were unable to breastfeed. His first success was a premature infant who could not tolerate his mother's milk or any of the usual substitutes. People quickly recognized the value of the new product, after Nestlé's new formula saved the child's life, and soon, Farine Lactée Henri Nestlé was being sold in much of Europe. Nestlé has been serving Pakistani consumers since 1988, when the parent company, the Switzerland-based Nestlé SA, first acquired a share in Milkpak Ltd.

Principles of marketing strategy

The following five principles of marketing strategy we are discussing here.

1. Facilitate a Business Achieve Competitive Advantage:

The purpose of marketing strategy is to facilitate a business achieve and sustain a competitive advantage in the marketplace.

Here, the phrase “to facilitate a business achieve” rather than “to achieve” is used in light of the multi-functional scope of competitive strategy that underlies a business achieving and sustaining a competitive advantage. Since a number of principles that I am proposing relate to the purpose of marketing strategy, some might view “a purpose” as more appropriate than “the purpose.”

2. Create Market-based Assets:

The purpose of marketing strategy is to create market-based relational assets and market-based intellectual assets.

Representative market-based relational assets include brand equity, customer base and customer relationship equity, channel members and channel relationship equity, and marketing alliance partners and alliance relationship equity. Representative market based intellectual assets include market knowledge and marketing knowledge. (see: Srivastava, Shervani and Fahey, Journal of Marketing, 1998)

3. Consumer and Customer Behavior Modification:

The purpose of marketing strategy is to shape the behaviors of customers and consumers in ways that are conducive to their acquisition, possession and/or consumption of the firm’s product offerings.

Among the avenues available to firms to achieve consumer and customer behavior modification are: persuasive communication, branding, positioning, product innovation, packaging, distribution and pricing.

4. Enhance Salience of Non-Price Criteria in Buyers’ Choice Decisions: The purpose of marketing strategy is to enhance the salience of non-price criteria vis-à-vis price in buyers’ choice decisions.

Nestle Pure Life Water & Current Market Situation:

The launch of Nestle Pure Life in December 1998 was a truly significant episode in the history of Nestle Pakistan. Nestle Pure Life was going to get the entry of Pakistan’s growing water market. At the same time Pakistan became the first country where Nestle launched the new brand. Nestle Pure Life is a premium drinking water, produced to the highest standards of safety and purity as per the website suggests. It is ideally balanced with essential minerals like vitamins, calcium and many other useful items. According to nestle, pure water product is the stars of nestle having useful ingredients in every drop of water which are essential for being hydrated all the time. Capitalizing on its strong brand recognition, aggressive pricing and supported by a strong marketing campaign, Nestle Pure Life has made very strong inroads into the water market in Pakistan. Nestlé PURE LIFE is available around the globe today in Canada, USA, Mexico, Brazil, Argentina, South Africa, Saudi Arabia, Jordan, Egypt, Lebanon, Turkey, Russia, Uzbekistan, Pakistan, China, Thailand, and the Philippines.

“A social and managerial process where by individual & groups obtains good food and good life through creating and exchanging products and values”.

Launched on the North American market in 2003, Nestlé PURE LIFE is destined to become the world’s top and most widely distributed brand by 2010. Nestle is also willing and has goal to achieve the $1 Billion enterprise by 2014. Nestle Pure Life is a premium drinking water, produced to the highest standard of safety and purity. The company is seeking to provide customer with pure drinking water on suitable prices make the product as convenient as possible. According to their claim that they provide the best food throughout the world

Nestle is leading brand in water market and has left behind many local brands which were working before the launching of Nestle Pure Life. Now it has maximum market share in developed and major cities of Pakistan like Lahore, Karachi, Islamabad, Multan, Hyderabad and many others. As we have discussed earlier that Nestle is going to become the fully market leader of water market in Pakistan, signs are clearly visible to achieve the set point of Nestle. Nestle Pure Life is also the star product of Nestle Pakistan and most probably all over the world where Nestle Pure Life exist. Here you can see the market share chart for the product and after that there is a Boston Consultancy Group Matrix is shown which would describe the ranking of Nestle Pure Life in product portfolio of Nestle Pakistan.

Information and data pertinent to the market’s current situation:

They keep the information of the other companies what they are offering. Try to improve their strategies from others so that they can promote their product more. like more companies are now coming in the market so there is more completion in the market and they have to be up to date from the current situations

Company’s marketing goals and objectives:

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 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.

SMART Analysis:

SMART is an acronym which tells us that when ever we set any companies objectives they should be

,S =Specific

M= Measurable

A = Actionable or Achievable

R = Realistic

T = Time Frame

Market Share:

Nestle is now a days willing to have more and more market share so that it could achieve the goals that are set. The goal for market share will be discussed below

Nestle occupied 85% of drinking water market in all over the Pakistan. In Lahore Nestle Pure Life has 69%of total market, Sparklet has 13% and Cool have 11% and remaining 7%are kept by other local companies. In Karachi 50% of market is kept by Nestle and 25% by AVA and remaining 25% is kept by other local companies. As for as Islamabad is concern Nestle Pure Life has 65%of market Share. They have certain goals and objectives which they want to achieve. They want to create and promote their products to create value for their product. They have the resources for increasing their product’s quality and compete it with the other companies. They conduct researches for that and try to get their objective which they have decided. They are promoting their product by creating customer awareness.

Nestlé believes that, as a general rule, legislation is the most effective safeguard of responsible conduct, although in certain areas, additional guidance to staff in the form of voluntary business principles is beneficial in order to ensure that the highest standards are met throughout the organization.

Nestlé is conscious of the fact that the success of a corporation is a reflection of the professionalism, conduct and the responsible attitude of its management and employees. Therefore recruitment of the right people and ongoing training and development are crucial.

SWOT Analysis of the Company:

SWOT analysis would tell us in better way about the competitive position of the company. Following is SWOT analysis of the company.

Strength:

•Strong Brand name (NESTLE LOGO & FAMILY BRAND)

•Pure Drinking Water in market

•Mineral Product (Free of chemicals)

•Only brand in the area maintaining its quality and taste

•It has largest market share

•Ease of availability of their products all over Pakistan

•Immense product range and huge diversification leads to reduce risk.

•High quality standards

Weakness:

•Communication is weak

•Lack of Awareness

•Weak Distribution Channels

These distributors, though observing the rapid increase in customer demand refuse to hire new, more efficient and innovative staff that would take the organizations to rise rather they stuck to their old staff members.

Opportunities:

•Concentrating on these areas of weakness can increase sales

•It has opportunity to advertise its product in better way.

•It has strongest opportunity to increase its product line.

Making segments in mineral water. Mineral water should be of different taste E.g. like AQUA FINA in USA has introduced mineral water of different taste. So it captured the market

Threat:

•Segments are being shared by competitors

•Under cutting by competitors.

•Uncertain conditions will affect the sale

Competitive Analysis

Competitive analysis includes the comparison of one organization with its competitor. It differentiate product and tells which product stands at which position. It tells about the differentiation of characteristics and weaknesses of the product with its competitors. As we know that more important competitor of Nestle is Aqua Fina

Nestle Pure Life

Largest Market

Market Share Pure Water with Vitamins Mineral Water (chemicals) Availability of Nestle Water is easy

There is only 1 segment in Nestle Pure Water. It has only one taste. So in sense of segmentation, it’s weak product. So company should make pure water of different tastes.

Aqua Fina

Low Market Share Pure Water with Vitamins Mineral Water (chemicals) Availability of Nestle Water is easy

Availability of Product is difficult there is only 1 segment in Nestle Pure Water. It has only one taste. So in sense of segmentation, it’s weak product. So company should make pure water of different tastes.

It has different taste. It has segmented. It has introduced different segments in mineral water of different tastes, so it has a strong segmentation. So due to segmentation it’s increasing its sale

Marketing strategies options

Market Segmentation and Targeting Strategy and Consumer Profile Analysis:

Market Segmentation:

For getting the maximum market share and respect of the product in the minds of the consumer, as per our observation and market survey we have concluded that Nestle Pure Life Water’s segmentation is based on two points.

Geographic Segmentation

Demographic Segmentation

Geographic Segmentations:

The company has divided its geographic segmentation in several regions. First they have the segmentation of a whole country and from each provincial capital, they divided it’s areas into north, east, west, south. So that it could be easy for the company to work efficiently on it’s supply chain management.

Demographic Segmentations:

Nestle Pure Life isn’t a supreme quality product that only the high class uses. The product is for all. Infant to seniors. There is no age, sex, income and any other kind of limitation on use of the product. The product is for all. Anyone can use the product as per need

Targeting Strategy:

According to our observation and market survey, we have concluded that as such there is not set demographic techniques to set the specific target market. Because, water is something that everyone uses. Everyone can use any size of bottle that Nestle is offering. There are some variations that can be made throw OUR OBSERVATION but not from the company Nestle Pure Life comes in four different sizes. These four are targeting different types of people and lifestyles. The smallest size of Nestle Pure Life Water of 0.5L. This size is being heavily used by the consumers in place of soft drink. University and Colleges are also included in its target market of this size. But the product is used by everyone in the society also. It is not only specified people that have been discussed above. The second size of the Nestle Pure Life Water which is about 1.5L. This size is being used in mostly meetings. You can say that any kind of organizational meeting or any other social meeting, this product is being used. The third size of the Nestle Pure Life which is used in mostly houses and offices in the waiting area. The fully household product and also using in executive rooms in offices with the dispensers. This Nestle Pure Life Water Bottle is also very helpful in many dispensers available in the market with good options

The Pricing Strategy:

We can easily observe that Nestle itself is not taking active part in social welfare. And on the other hand, we see the lower prices of the product as compared to the other FMCGs Company’s products like Unilever, Colgate”. Palmolive and Procter and Gamble. If we look at the prices, we can observe that Nestle is also using its name for the promotional activities and pricing strategies also. They have to maintain their level of efficiency and always provide the best at best price. Nestle cares about the customers. As the time is of inflation, nestle is trying to overcome the pricing problems to the extent they can do. Nestlé’s point of view is “Only by understanding their needs can we serve our consumers to the fullest Profit earning is the core aim of every company but in case of nestle their profit margin is small just for the sake of customers trust and happiness. Only a few amount of profit is collected from pure life water. Nestle always strive to give superior product at low rates. Nestle is also one of the leader of retaining their customers. This is one reason of their success. They use the simple formula for the price that is Cost + Profit.

Market Distribution and Channels Strategy:

Nestlé Pakistan's supply chain and distribution makes sure that Nestlé products are accessible, no matter where consumers are in Pakistan. Nestle aims to put together processes from the farm to markets, and make sure products are distributed to the consumers at the correct time, the right cost and in the accurate quantities. In the first quarter of 2006, Nestle proved it by delivering an amazing 136 million kg of Nestlé products in Pakistan. The mission of Nestle Supply Chain is to

Optimize and consolidate resources and processes for a low-cost but efficient

Develop and manage simplified and effective supply network to achieve a high level of service

3. Create a continuous improvement culture driven by performance measures and reward

Market Positioning Strategy, IMC Plan, Perceptual Mapping and USP

There are certain points on which they occupy their customers and those points are very helpful in retaining their customers. There are number of water products available in Pakistani market including Sparingly, Sprarklet, Aqua Fina, Kinley, Deja Blue and many others. But Nestle Pure Life attracts its customers throw many reasons.

The main reason is Pure Water which is the name of this product. Rests of the water products are using chemicals which can be harmful for the human body but Nestle Pure Life is the only water product which is pure in nature. That is also the unique selling point of Nestle Pure Life. This is the most powerful point that is in the mind of the customers while purchasing any water bottle in their routine life. The brand name is also very important for the consumers. The slogan of Nestle is “Good Food Good Life”. That is very attractive slogan people can attract from. It puts the perception in the minds of people that they’re being offered good products for their healthy lifestyle. If you look at the logo of Nestle, you’ll get to know that a bird is feeding the children. Obviously a mother can’t deceive the children. Nestle pure life is a brand of nestle which explains a big symbol of quality to customers. Nestle Pure Life shows in their ads about the purity of water and the water need for your body. In its launching advertisement, the company advertises Nestle Pure Life very successfully. In that advertisement, a lady is drinking Nestle Pure Life Water and then it goes towards inside the body to show the functions of pure water. That was the awesome commercial that boosted the sale of Nestle Pure Life. Nestle is also advertising on famous websites like you can observe that whenever you will login to your face book account, the ads of Nestle will be there. There are number of sign boards and banners you will see in the cities to aware people about the products of Nestle. Thus, Nestle is using all types of media to advertise their products in anyway. When Nestle Pure Life was launched, they distributed the free samples of 0.5L bottles for market testing and for their advertising purpose. Then a short walk was also arranged for the sake of good health and seminars was also conducted to make sure about the pure water needed your body. To understand the depth of Positioning, we will divide into three steps

Personal Selling:

A direct Vendor Selling Activity was coordinated and carried out during the summer months of June, July, and August 1999 in Lahore. A team of vendors, clad in branded T-shirts, caps and jackets, sold chilled 0.5 liter bottles to traveling customers on all major intersections. The brand got great mileage out of this innovative idea of personal selling in terms of brand awareness, paid trial, image as well as real sales.

Publicity:

Pure Life was launched on 14 December, 1998 in Karachi with a huge amount of enthusiasm and positive response shown by the locals. The successful story of its launch was printed in all the local newspapers the next day. This greatly helped in creating awareness of the brand and gave its introduction a good start.

Sales Promotion:

Specific promotions of Nestle Pure Life were arranged in some of the key outlets of Lahore. Elaborate shelf space was acquired for product display and specially designed POS material was extensively used to promote sales. On a 12-bottle purchase of 1.5 ml, one 1.5 ml bottle was offered free to consumers. Similarly on a 6-bottle purchase of 1.5 ml, one 0.5 ml bottle was offered free. Regarding trade promotion, the retailer was also given an additional discount of 4 % during this sales promotion. Not only did the sales of Nestle Pure Life grow tremendously during the promotion, these continued at a higher pace even after it was over.

Task 3: Implication of changes in the marketing environment for organization

The company “NESTLE” has the big share in the world business because the people like the milk range of this company to make their kids healthy. The company is going to meet his objectives and the customer’s aspects because it is fulfilling the needs of the peoples.

The marketing environment is a marketing term and refers to all of the forces outside of marketing that affect marketing management’s ability to build and maintain successful relationships with target customers. The market environment consists of both the macro environment and the microenvironment.

These are the factors which can changes the marketing plans by these factors any organization bring the changes in there marketing environments.

Micro environmental implications:

The microenvironment refers to the forces that are close to the company and affect its ability to serve its customers. It includes the company itself, its suppliers, marketing intermediaries, customer markets, competitor, and publics.

The company aspect of microenvironment refers to the internal environment of the company. This includes all departments, such as management, finance, research, purchasing, operations and accounting. Each of these departments has an impact on marketing decisions. For example, research and development have input as to the features a product can perform and accounting approves the financial side of marketing plans and budgets.

The company supplier’s impacts:

The suppliers of a company are also an important aspect of the microenvironment because even the slightest delay in receiving supplies can result in customer dissatisfaction. Marketing managers must watch supply availability and other trends dealing with suppliers to ensure that product will be delivered to customers in the time frame required in order to maintain a strong customer relationship.

The people’s impacts:

Marketing intermediaries refers to resellers, physical distribution firms, marketing services agencies, and financial intermediaries. These are the people that help the company promote, sell, and distribute its products to final buyers. Resellers are those that hold and sell the company’s product. They match the distribution to the customers and include places such as wall-mart, Target, and Best Buy. Physical distribution firms are places such as warehouses that store and transport the company’s product from its origin to its destination. Marketing services agencies are companies that offer services such as conducting marketing research, advertising, and

consulting. Financial intermediaries are institutions such as banks, credit companies and insurance companies.

The customer’s impacts:

Another impact of micro environment is the customers. There are different types of customer markets including consumer markets, business markets, government markets, international markets, and reseller markets. The consumer market is made up of individuals who buy goods and services for their own personal use or use in their household. Business markets include those that buy goods and services for use in producing their own products to sell. This is different from the reseller market which includes businesses that purchase goods to resell as is for a profit. These are the same companies mentioned as market intermediaries. The government market consists of government agencies that buy goods to produce public services or transfer goods to others who need them. International markets include buyers in other countries and includes customers from the previous categories.

Competitors are also a factor in the microenvironment and include companies with similar offerings for goods and services. To remain competitive a company must consider who their biggest competitors are while considering its own size and position in the industry. The company should develop a strategic advantage over their competitors.

The departmental people’s impact:

The final aspect of the micro environment is publics, which is any group that has an interest in or impact on the organization’s ability to meet its goals. For example, financial publics can hinder a company’s ability to obtain funds affecting the level of credit a company has. Media publics include newspapers and magazines that can publish articles of interest regarding the company and editorials that may influence customers’ opinions and our mostly products are selling on the public advertisement because the people are the too much concision about their health. Government publics can affect the company by passing legislation and laws that put restrictions on the company’s actions. Citizen-action publics include environmental groups and minority group and can question the actions of a company and put them in the public spotlight. Local publics are neighborhood and community of the organizations and will also question a company’s impact on the local area and the level of responsibility of their actions. The general public can greatly affect the company as any change in their attitude, whether positive or negative, can cause sales to go up or down because the general public is often the company’s customer base. And finally, the internal publics impacts include all those who are employed within the company and deal with the organization and construction of the company’s product.

The macro environmental impacts:

The macro environment refers to all forces that are part of the larger society and affect the microenvironment. It includes concepts such as demography, economy, natural forces, technology, politics, and culture.

An Other thing in NESTLE refers to studying human populations in terms of size, density, location, age, gender, race, and occupation. This is a very important impact to study for marketers and helps to divide the population into market segment and target markets.

The markets impacts:

Each market impact has different characteristics and causes they find important. This can be beneficial to a marketer as they can decide who their product would benefit most and tailor their marketing plan to attract that segment. Demography covers many aspects that are important to marketers including family dynamics, geographic shifts, work force changes, and levels of diversity in any given area.

Another aspect of the macro environment is the economic environment. This refers to the purchasing power of potential customers and the ways in which people spend their money. Within this area are two different economies, subsistence and industrialized. Subsistence economies are based more in agriculture and consume their own industrial output. Industrial economies have markets that are diverse and carry many different types of goods. Each is important to the marketer because each has a highly different spending pattern as well as different distribution of wealth.

The Natural impacts:

The natural environment is another important impact of the macro environment for the organization. This includes the natural resources that a company uses as inputs and affects their marketing activities. The concern in this area is the increased pollution, shortages of raw materials and increased governmental intervention. As raw materials become increasingly scarcer, the ability to create a company’s product gets much harder. Also, pollution can go as far as negatively affecting a company’s reputation if they are known for damaging the environment. The last concern, government intervention can make it increasingly harder for a company to fulfill their goals as requirements get more stringent.

The Technical impacts:

The technological environment is perhaps one of the fastest changing factors in the macro environment. This includes all developments from antibiotics and surgery to nuclear missiles and chemical weapons to automobiles and credit cards. As these markets develop it can create new markets and new uses for products. It also requires a company to stay ahead of others and update their own technology as it becomes outdated. They must stay informed of trends so they can be part of the next big thing, rather than becoming outdated and suffering the consequences financially.

The political impacts:

The political environment includes all laws, government agencies, and groups that influence or limit other organizations and individuals within a society. It is important for marketers to be aware of these restrictions as they can be complex. Some products are regulated by both state and federal laws. There are even restrictions for some products as to who the target market may be, for example, cigarettes should not be marketed to younger children. There are also many restrictions on subliminal messages and monopolies. As laws and regulations change often, this is a very important aspect for a marketer to monitor.

The final aspect of the macro environment is the cultural environment, which consists of institutions and basic values and beliefs of a group of people. The values can also be further categorized into core beliefs, which passed on from generation to generation and very difficult to change, and secondary beliefs, which tend to be easier to influence. As a marketer, it is important to know the difference between the two and to focus your marketing campaign to reflect the values of a target audience.

When dealing with the marketing environment it is important for a company to become proactive. By doing so, they can create the kind of environment that they will prosper in and can become more efficient by marketing in areas with the greatest customer potential. It is important to place equal emphasis on both the macro and microenvironment and to react accordingly to changes within them.

Development to achieve the marketing objectives

Marketing objectives

management

ways

Time frame

To meet our customers

Marketing management

Retailer customers by the

Media adds

At 30th may,2011

By the suppliers

Purchase department

To put the name of the company on the product

15th june, 2012

By the politically

Upper management

To involve them in to fulfill their requirements

30th may,

2011

 

Conclusion:

Nestle is the world leader in FMCG industry. People trust on the products launched by the company even the product is facing some problems. Nestle was doing its good job in past but now it is facing some problems of low quality of their products. Nestle is sued by someone they claim that they are doing unethical business. They are mixing unhygienic things which can cause damage to customer’s health. Its example is that their water is not pure and good for health. You can see dust partials in Nestle mineral water when you keep it in sunlight that shows its product quality is down. Now they have to do more making their strong position in market because when you lose your image in customer’s eye then it is difficult to renew their image.


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