Microsoft Word NgoHuynhTraGiang 050607190115 docx NGÂN HÀNG NHÀ NƯỚC VIỆT NAM TRƯỜNG ĐẠI HỌC NGÂN HÀNG TP HỒ CHÍ MINH ESSAY TOPIC ANALYZING THE MARKETING ACTIVITIES OF NESTLE NAME Ngô Huỳnh Trà Giang[.]
NGÂN HÀNG NHÀ NƯỚC VIỆT NAM TRƯỜNG ĐẠI HỌC NGÂN HÀNG TP HỒ CHÍ MINH ESSAY TOPIC: ANALYZING THE MARKETING ACTIVITIES OF NESTLE NAME: Ngô Huỳnh Trà Giang STUDENT ID: 050607190115 CLASS: HT01 TABLE OF CONTENTS INDUCTION I NESTLE OVERVIEW INTRODUCTION: DATA: II NESTLE’S MARKETING STRATEGY: MARKET SEGMENTATION: TARGET MARKET: POSITIONING OF NESTLE: III COMPETITIVE ADVANTAGES OF NESTLE: IV MARKETING MIX: PRODUCT: PRICE PLACE PROMOTION 10 V CONCLUSION: 10 REFERENCES 12 INDUCTION Today, marketing management is something that businesses have to go through in their business process This process is crucial to the success of a company It involves establishing a strategy for the company and its products, and it helps in determining the type of marketing mix that will be most effective It helps in setting clear goals and objectives for the team, and it ensures that the entire team is focused on the right direction It also makes sure that no one is wasting time on activities that are relevant to the business or customers Nestle is also one of the successful companies in marketing management And in this essay I will outline the factors that helped Nestle achieve that success I NESTLE OVERVIEW Introduction: Founded in 1905 as a result of a merger of Anglo-Swiss Milk Company, Nestle was first formed by Henri Nestlé in 1866 Established over 150 years ago, Nestlé is the world’s largest, most diversified food and beverages company It is a Swiss Company established in 1866 by its founder Henri Nestle While its main foray is foods and drinks, it has hundreds of products, nearly 2000 Some of its most famous products and brands include Maggi, Kit Kat, Nespresso, Nescafe, etc Nestlé provides a wide, diverse range of products, suitable for use and consumption of everyone ranging from infants to adults The overall turnover for Nestle was approx 90 billion Swiss Franc in 2016 It operates 418 factories in 86 countries, employing nearly 339,000 people worldwide Its products are available in 191 countries of the world Nestle also is a leading researcher in the field of nutritional sciences It invests nearly 1.5 billion Francs yearly on research and development Currently(October 2018), Nestle has 17 R&D and Testing centres worldwide Data: Ø Nestlé around the world 2020: Sales 84.3 billion Hire 273.000 employees worldwide 376 factories in 81 countries Ø 2020 Sales by geographic area Americas: CHF 37.7 billion (45%) Europe, Middle East and North Africa: CHF 24.5 billion (29%) Asia, Oceania and sub-Saharan Africa: CHF 22.1 billion (26%) Ø Strong sales contribution from emerging markets: Well positioned in fast developing emerging markets 2020: 41% (as percentage of Group sales) II NESTLE’S MARKETING STRATEGY: Market Segmentation: Nestle’s market segmentation is similar to many different popular companies It has basic segmentation-strategies: Ø Geographic: Nestle is based on the weather of the market where they focus on For instance, Nestlé Singapore segmented its market for Nescafe Ice depending on the geographic weather warm hot, and cold During the warm season, consumers make this coffee with normal, chilled, or cold water mixing ice cubes to bring freshness to their bodies In contrast, consumers can make this coffee with hot water to keep their bodies warm and comfortable in the winter Ø Demographic: The customer segmentation of Nestle is based on age, gender, income , education Age: Nestle produces many kinds of products for different age groups For example, it offers milo for children and coffee for adults Besides, Nestlé segmented market area for its main products based on the generation For the products Cerelac, Lectogen, 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 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 Lactogen: Nestle Singapore brings full cream milk powder in the country It gives baby required nutrition Lactogen one is for childs whose age not more than 6months and lectogen is for babies whose age is below year Income: Nestle's products' price is affordable which suits every social class so they produce the products in small quantities so that everyone can buy them Occupation: Nestle also manufactures its products based on consumers occupations The example of this is Nescafe classic: This product is for that type of persons those who work busy and hard and requireds more freshness Both the male and female who need more caffeine and this type of needs Nescafe classic is for them Ø Psychographic: Nestle segments its products based on life style and personality Nestle provides KIT KAT these people who really want to enjoy chocolate Nescafe in is for exclusively those customers who are really busy and not have enough time They can save their time by taking Nescafe in All the things sugar, milk, and coffee remain mixed Ø Behavioral: 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 high nutrition for baby’s whose age is less than year Two very important things rice and milk remain added in cerelac On the other part, cerelac includes vitamins, more minerals, and all major useful nutritious elements for babies Target market: Nestle’s target market has two special things: Ø DIFFERENTIATED: The nestle company chooses differentiated marketing, where they provide different products for different segments on basis of age, occupation, seasons, climate , gender etc Ø CONCENTRATED: By concentrated marketing the nestle has gained a strong market value because of their good knowledge of their customers => In general, Nestle is specialized in making baby drinks and white-collar who are busy Positioning of Nestle: Nestle has features different from other companies to help their success which are in the same industry: Ø Product differentiation: Nestle produces many numbers of products for target customers, they produce around 25 varieties of Nido for children, it specially manufactures cereals and lactogen and for newborn babies Ø Channel differentiation: Nestle sells its products by experienced salesmen and safe transporting so their products are easily reached to the customers Ø Image differentiation: The Nestle logo is completely different from other companies and competitors so that it is easily identified by the customers Ø Service differentiation: The nestle company has 24/7 helpline centers so that the customers can be easily accessible to the problems or any doubts III COMPETITIVE ADVANTAGES OF NESTLE: Ø Nestle competitor is Pepsico which is a popular beverage and food processing company that was formed during the year 1898 The company is headquartered in New York, United States The company has been in business operations of manufacturing and selling of beverages, snacks based on grains, and many other products Ø The company was formed after the merger of Pepsi-Cola and Frito-Lay companies Over the years, Pepsico has been expanded to a great range of products in food and beverages It is a famous brand worldwide and more common among the youth The company has a great brand image and its approximate value of the brand is about $19.4 billion This brand has great loyal customers and has a wide distribution network The company has an excellent supply chain network worldwide and due to which their products are made available everywhere Ø The company’s main highlight is their tie-up with various sports and music events and thereby increasing the brand value Due to the company’s great brand value, Pepsico is considered as one of the top Nestle competitors Nevertheless, Nestlé is not afraid of competition because they have competitive advantages that make they are stronger than Pepsi: Ø Firstly, Bolstered Research & Development: This is one of important their advantages Over the years, they have heavily invested in the research and development division The company, backed up by its extensive research efforts has gained a tremendous edge in market data and consumer insights compared to their close rivals The company now knows how to capture a market and drive more sales to boost revenue earnings altogether This investment paid off in the form of 1.89% of their total revenue generation In contrast, Nestle’s closest rival in these terms, Pepsico, only invested 1.2% Ø Product Availability: When it comes to Nestle, they believe strength in diversity Despite being their largest operational market in the world, The U.S only generates 28.5% of the company’s total revenue stream Their second largest market, China, generates only around 8% In contrast, Pepsico earns 56% of their revenues from The U.S only Nestle’s varied types of products are operational in 189 countries worldwide This goes to further illustrate how the company doesn’t put all their eggs in one basket Compared to their rivals, Nestle has done an exemplary job of branching out to almost every corner of the world, ensuring product availability at a faster rate than any other market operator Their products are more frequently available on stores than their competitors, which has given them a competitive edge They have established product accessbility for online shopping faster than their rivals as well, in markets all over the globe Ø Plant-Based Meals: Nestle has just recently entered the meatless meal market too, offering plant-based meals for vegetarian as well as ‘flexitarian’ dieters People have started to consume less meat and include more veggie recipes in their eating habits Nestle seized this opportunity to penetrate an untapped market and gain a competitive advantage by offering food options to a new branch of consumers This addition is generating higher sales volumes compared to their rivals as well IV MARKETING MIX: Nestle’s marketing mix examines the four Ps of one of the world’s most successful FMCG companies Nestle’s marketing mix demonstrates that the company has a solid product range, which contributes to its marketing mix’s success Below are the products, price, placement and promotions of Nestle Product: Nestle is one of the companies have variety products, they have more than 10 types of different products from drinking to food suit their target market: Ø Beverages – One of the most known coffee brands Nescafe, belongs to the house of Nestle and is one of the cash cows for Nestle However, it is not the biggest cash cow Nestle has a worldwide distribution and has many different variants Looking at India, Nestle has also launched Nestea Ø Milk and Milk products – Nestle everyday, Nestle slim and Nestle Milk maid are some of the milk and milk based products from the house of Nestle Ø Prepared dishes and cooking aides – Nestle has a third category of products which comes into prepared dishes and cooking aides The major cash cow of Nestle lies in this segment, which is Maggi Noodles Probably one of the most widely sold ready to cook noodle brands is Maggi Maggi has a fantastic taste and quality Thus, it was not a surprise, that Nestle expanded the Maggi brand to create an umbrella of different products like Maggi pasta, Maggi sauce, Maggi cubes etc The maggi range contributes vastly to the bottom line of Nestle Ø Chocolates – Nestle has some popular chocolate products, most popular being Nestle Kitkat, Munch, Milky bar, Eclairs and Polo The newly introduced Alpino is targeting the gifting segment in response to various chocolates like Dairy milk and Bournville by Cadbury The chocolates segment of Nestle is a star, where the competition is high and the expense is high but at the same time the market size is huge as well Ø Nutrition and Health Science:- Nestle’s infant formula and baby meals are included in this category Ø Waters:- Nestle’s Pure Life is the world’s most popular bottled water brand, with distribution in more than 100 countries Price Ø Nestle aspires to provide a diverse range of products and services that respond to changing consumer demands It aspires to make items that are both good for people and good for the environment The price is dependent on the market of each individual products For example, Nescafe and Maggi being the clear leaders are priced with higher margins for the company as compared to competition This is because the product quality is good enough and a bit of skimming price will not cause the customer to switch brands Ø Nestle offers a variety of sizes and packaging options for both Nescafe and Maggi You may even purchase a 16 packet Maggi in supermarkets, whereas 5rs Maggi can be found in tiny retail shops Due to fierce rivalry from other companies, Nestle offers competitive prices on other items such as Kitkat and Munch Nestle will be priced similarly to several of Cadbury’s chocolate products in the chocolate market Ø As a result of the diversity provided, customers can make their own decisions based on their needs Place Nestle follows the FMCG strategy of distribution which involves breaking the bulk The typical distribution strategy of Nestle is as follows: ð Manufacturing => C & F agent => Distributors => Retailers => Consumer ð Manufacturing => Bulk buyers => Consumer Ø These are the two different forms of distribution which Nestle has It is typical of any FMCG company However, the Nestle channel is known to be strong with a good marketing and sales network for channel distribution Ø On top of it, Nestle regularly introduces trade discounts and various tactics to keep the channel motivated The major challenge is in the distribution of Maggi which is the most in-demand product along with Nescafe Due to these two products, Nestle is able to drive other products in the market as well Thus, on purchase of one weak product, the distributor might get a discount on the stronger product or vice versa Ø The challenge for Nestle is in the chocolate segment where it faces stiff competition from Cadbury and hence selling the chocolates becomes difficult Kitkat might have its own brand positioning, but it is not better than Dairy milk Thus, converting retailers to sell Nestle instead of Cadbury is the toughest task for Nestle This is converted mainly through promotions Promotion Ø When it comes to branding their products, Nestle has always come up with some creative marketing concepts Nestle aims to identify the most effective promotional medium They face tremendous competition from their local and global competitors Nestle uses two types of sales promotion techniques – Trade promotion and Consumer promotion Nescafe introduced Nescafe tunes, which are still spoken about today They have always attempted to persuade consumers to purchase their products Take Maggi, for example, which is linked with two-minute snacks that women can readily prepare It became well-known among children and moms as a result of this They’ve always prioritized product quality and nutritional value Ø Maggi and Nescafe have pushed sales and marketing because of their strong presence on the ground Nestle’s distinct marketing message for Kitkat, a wellknown Nestle trademark, is “Have a Break, Have a KitKat,” which has become synonymous with the brand Nestle employs a variety of media, including television, billboards, print commercials, and online advertisements V CONCLUSION: Ø Nestle is one of the successful FMCG manufacturers and distributors in the world, and Nestle is no stranger to the Vietnamese market Nestle owns many famous 10 brands such as Milo milk, and KitKat is considered one of the famous and bestselling chocolate candies around the world Ø To have the current global recognition, Nestle has had to make a lot of efforts and their success comes from two main factors: • First, they correctly identified and met the needs of their target market Nestle spends a huge budget to research the market, understand the needs and tastes of customers Thanks to that, they have launched many products that meet the needs of customers and create a great resonance • Second, undeniably their success cannot fail to mention the contribution of the Marketing mix Based on that, they launch many products that meet the needs of customers to satisfy them In addition, they can also increase the shopping demand of customers when offering attractive promotions Thanks to the right strategy from the Marketing mix, they are able to expand their products and markets 11 REFERENCES Bhasin, H., mazuumder, S alam, Mcnicholas, S., Wan, M., & Subramanian, A (2018, December 31) Marketing mix of Nestle - Nestle Marketing Mix Marketing91 Retrieved December 29, 2021, from https://www.marketing91.com/marketing-mix-nestle/ Competitive advantage of Nestle Competitive Advantage Of Nestle - 3088 Words | Internet Public Library (n.d.) Retrieved January 3, 2022, from https://www.ipl.org/essay/Competitive-Advantage-Of-Nestle-P358F92PC4DR Published by nestleblog987 View all posts by nestleblog987, nestleblog987, P by, nestleblog987, nestleblog987, V all posts by, & (required), N (2017, September 2) Market segmentation Nestle Retrieved January 3, 2022, from https://nestleblogcom.wordpress.com/2017/09/02/market-segmentation/ Top Nestle competitors and Alternatives | Craft.co (n.d.) Retrieved January 3, 2022, from https://craft.co/nestle/competitors Understanding nestlé Nestlé Global (n.d.) 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