assignment 2abcd

7/30/2019 Assignment 2abcd

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Students name: Nguyen Hoang Loc Anderson

Class: SUD 10

Subjective: Marketing

Identify and explain the macro and micro environmental factors in your country whichmight influence the companys marketing decisions:

- The market environment comprises all aspects of a market which affect the companysrelationship with its customers and the patterns of competition. It not only has a major effect onthe operation of a business but also the business can control and change it. The micro includessuppliers, distributors, customers, competitors, employees, intermediaries and interest groupshave all identified as key elements of the market environment.

The Micro Environment

First, suppliers who can provide to the company with the materials and services whichthey need to achieve their business activities. There are many directly influences on thecompany form a suppliers behavior. Therefore, having a good relationship with suppliers

is very important, this will lead Nestl to remain competitive and secure quality products.Moreover, the company can receives a good price which is a decrease in raw materialprices will affect the firms marketing mix strategy and may even force low price.However, Nestl needs to identify who to use to supply them, on the responsibility ittakes for these suppliers and on the terms and conditions it adopts. They should researchcan the suppliers provide high quality products at a good price. Moreover, identifying thesuppliers got the flexibility to respond to a companys demands. The reason for thisresearch that Nestl can control and change the materials and services from their

Nestl

Suppliers

Distributors

Competitors

EmployeesInterest

groups

Intermediaries

Customers


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suppliers. The main suppliers are Lm ng, Dak Lak, Dak Nng v Gia Lai which arethe main area that produce the most caf in Vietnam. Nestle has supported farmers in DiLinh district and Lam Dong Province in the successful implementation of certifiedsustainable coffee production standards 4C for 175 farmers and two coffee purchasingagent under Nestle Vietnam.

Second, customers are the most important for the company to carry out their businessactivities. Without customers, without business. Therefore, the company should providethe best goods and services which can meet customer needs and wants with the purposeof receive the satisfaction of customer. For Nestl, customers are obviously the key tosales. They must monitor customer needs and attempt to anticipate how these willdevelop so that they can meet these requirements effectively now and in the future. Tounderstand their customers, the company needs attempting to provide more informationon customers by using V.I.P cards, mail list, promotion, recommendations to online inorder to offering them appropriate deals,building a good relationship with customers and

ensuring they come back time and time again.This helps Nestl easy to improve theproducts and develop the strategies to get more profits. Most of products of Nestle focuson children who would like to use chocolate flavor. However, the main customers thatNestle wants to attract are parents, who want the best products for their child, of thesechildren. So the company is providing more and more nutrition into its products. Forexample, Chuckie also builds up child's bones and makes them strong as it containsCalcium, Vitamin D, Phosphorous and Magnesium. And to keep children alert and full ofenergy the whole day. Chuckie gives out energy-releasing nutrients such as Protein,Carbohydrates, Fat, Thiamine, Riboflavin, Niacin, Vitamin B6 and Vitamin B12.

Distributors play a vital role in the deliver products to customers. Distributors are theintermediaries between the manufacturer and the consumer. Furthermore, they aremarketing companies and participate in the marketing process. Distributors are importantchannels since large manufacturing brands do not wish to distribute all the way to thefinal consumer The distributors used will determine the final price of the product andhow it is presented to the end customer. When the retailer has control over where theproducts are displayed, how they are priced and how much they are promoted in-store.Nestle has many wholesalers and retailers in Vietnam and presences in many markets ofVietnam. They need to create a good relationship with supermarkets such as Big C orMetrol, with retailers such as groceries or canteens, with distributors. These are the main

suppliers who will help them achieved by good negotiating skills and offering appropriateincentives or using changing distribution channels. Furthermore, they help company topromote, sell and distribute its products to final customer.

Competitors: Every company faces a wide range of competitors. A company must securea strategic advantage over competitors by positioning their offerings to be successful inthe marketplace.Competitors influence on the firms actions. If a competitor launches a


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new product for example, they will review their own marketing plan. Competitors, whomare part of their microenvironment and compete for firms customers, might try to taketheir best employees and might distribute through the same channels as company.Therefore, Nestl needs to establish exactly who their competitors are and the benefitsthey are offering to the market. For instance, Nestl offer benefits that are better than

those offered by competitors or they have a unique selling point .With the intention of tomaintain or improve its position within the market and the company will have a greateropportunity to compete effectively. The Nestles competitors come in the form of a list ofvarious competing names and well as presenting a few different types of competitorssuch as Vinamilk, Dutch Lady, Vina soy or Abbott. However, the main competitor ofNestle is Unilever which is organization provide many types of foods and drink beverage.

Employees are those people that are employed to work for the company. They are animportant because they drive value through customer satisfaction and embody themarketing concept. If the company has many high-quality employees, they can develop

the organization with the appropriate strategy. Furthermore, they are the vital interfacebetween a brand and its customers. With good employees who will know how to meet thesatisfaction of customers and provide what customer needs and wants. For this reason,Nestl needs employing the correct staff and keeping staff motivated which is anessential part ofcompanys strategic planning process. Training and development play acritical role in achieving a competitive edge; especially in service sector marketing.Moreover, employees need to be recruited and trained, motivated and developed, all ofwhich would support the functions and philosophy of marketing. In fact, Nestl inVietnam currently operates 4 factories and employs over 1,500 employees nationwide

and approximately 250,000 employees in the world.They have a staff rich in experiencewith high skill levels and over 150 professors who research the food nutrition.Furthermore, Nestle always provides training classes for the new employees in order todevelop their skills.

Interest groups are individuals or businesses that provide the capital for the company.They include customers, employees, the community, shareholders, suppliers and lenders.Therefore, Nestl needs to create a good relationship with interest groups that mean theyneed to be managed carefully as rapid short term increases in profit could detrimentallyaffect the long term success of the business. Moreover, they will easy to create a center of

attention investment from the interest groups in order to expand the capital. They also candecrease the interest if they have a long relationship with interest group. For example,Nestle should provide more holidays or bonuses or reasonable salary for employees tomake them feel comfortable and encourage them do better or they should set out somepolicies for shareholders to make them invest more money for the company or when theyhave a good relationship with suppliers or lenders who will help the company decreasethe interest or reduce the cost of raw material.


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The Macro Environment

The macro environment can be described in terms of six key components:

Political environment:o Government stability:Vietnam is the most peaceful country, which is without war and terrorism, inthe world. Vietnam had ranked 35th in the table of Global Peace Index whichbeen evaluated by the Economist Intelligence Unit in total 121 countries.Therefore, Vietnam attracts many investors and foreigners; this will lead theeconomy of Vietnam increase and bring many benefits to companies,especially, Nestl. For example, when the economy of Vietnam increase thatmeans the GDP also increase goes ahead increase the consumption of Nestl.

Moreover, the government also provides many policies which support toNestl easy for running on their business.o Foreign trade regulations :Nestl is the foreign company so when they import or export the raw material,they need to pay the tax for importing or exporting which depend on thematerial that the company import or export. Furthermore, they must to payVAT tax which will take 20% amount of money which is the profit ofcompany for each product. Nestle also needs to pay the corporate income taxwhich will take 14% amount of the revenue of company per month.

Economic Environment:o GDP trends:In the research, Vietnams GDP met $1,300 for one person per year in 2010and increase 6.8% and will continue increasing in the future(followingWikipedia). If the GDP increases, the income of each person will go up. Thatmeans, people can earn more money so they can have money to buy Nestl.This makes the profit and consumption of company also will be increased.


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o Inflation:Inflation rate is the important factor. Nowadays, the value of money isdecreasing so it leads to the cost of raw material, cost of manufacturing, costof sales will be increase. This makes the cost of Nestls products will be

more and more expensive. This will effect on consumption and customers ofNestl and the profits of company will also be decreased.

Note: Red is Vietnam

o Unemployment :Currently, companies are operating during the global economic crisis andsome companies have gone to bankruptcy. It makes the rate of unemploymentwill be increased. That means people cannot earn money so their financial isgoing to narrow and this leads people do not have money spend for Nestlsproducts. The unemployment rate in Vietnam reach at 4.65% in 2010, increase0.01% with 2007.

o Interest rate:This is very important to the survival of Nestl. They need a large number ofcapitals so they must borrow the money from the bank or government forrunning on their business. If the interest rate is low, they can pay the interest

from the loan. However, if the interest rate is high, it will effect on the profitof Nestl, they must spend amount of money for paying the interest. It makesthe company easy to bankruptcy. In fact, for conventional loans, interest ratesmust not exceed 17.0% / year. For some priority subjects, the interest ratedoes not exceed 15.0% -16.0% / year. For flood recovery loan, the maximuminterest rate of 15.0% / year. For loans subject to interest rate agreements:securities lending business, consumer loans: short-term interest rate: about

-5.00%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

40.00%

45.00%

1992-

2001

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Cc nc pht trin Cc nc mi ni v ang pht trin

Cc nc ang pht trin c hu Vit Nam


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18.5% / year, medium and long term loans: about 19.0% year (down 0.5% /year) (floating-rate application, the principle of interest rates 12 months plus(+) at least 4.0% / year.

o Exchange rate:Nestl is the foreign company so they need to import the raw material fromother countries. If the value of Vietnams currency has the lower than othercountries currency, when Nestl import the raw material they will spend moremoney for this. It makes the cost of products be increased, be more expensiveso the consumption will be decreased. In fact, Association members VietnamBank has also achieved consensus on the level of interest rates not exceeding14% / per year in 2012.Exchange Vietnam/USD from 11/2009 to 12/2010

SocialCultural Environment:o Population demographic:Population in Vietnam is the one of fifteen countries has the highestpopulation in around the world. In fact, Vietnam ranked 13th in the worldwith a total population of over 90 million people. (According to Wikipedia) .It means the demand of customers is high, this leads the consumption also ishigh so Nestl can attract more customers and improve the profit. Moreover,Vietnam's population is mostly young population who would like to use high

quality products and attracted which Nestl can provide for them.Furthermore, the population in Vietnam is young population which theaverage age is under 30 and this group represents a large share of thepopulation.o Income distribution:Vietnam is a developing country; therefore, the GDP of people is low. It justhas 1300 USD per year in 2011 .However; Nestl provides the products which


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focus on the middle and upon class. Consequently, the range of demand willbe decreased.o Class and social mobility:Nestl has focused on the people who have income belong to milled and uppergroups. In Vietnam, these people always want to buy high-quality products

not only for them but also for their children.o Life changes:Vietnam is one of the countries which are most import chocolate in the worldand Vietnam is the second country which is most export caf in around theworld. It means the flavor and consumption of customer in Vietnam ischocolate which is providing more and more in Nestls products.Furthermore, the habit of Vietnamese is chocolate; they prefer using chocolatethan other flavors.

Technological Environment:o Speed of technology:Internet is a good example for this case. Nowadays, internet is everywhere andpeople can use it every time that they want. Therefore, Nestl should to useinternet in order to promotion and commercial for its products. It is the mostpowerful way which helps customers knows more about Nestl. However, inVietnam, Nestle must to follow the law of promotion such as they cannotprovide wrong information of products for customers. Furthermore, whenpromote on the internet or TV they must pay a lot of money for advertisement.o Packaging:It is also the way to promotion and advertisement Nestls products. It will

provide more information about the nutrition and image of the company.However, they need to follow the measurement standard product packagingsuch as the requirements for limited space can be loosened to 60% whenpacked with ingredients in 300ml and 50ml or between 30g and 50g.

Environment factors:o Weather:Vietnam is a country of the tropical regions so the weather always is hot,especially, in the summer. In this season, people usually lose energy and feelthirsty so they need a product which can provide energy and water for them.Nestl provide consumers with the best tasting, most nutritious choices in awide range of food and beverage categories and eating occasions, frommorning to night.o Waste disposal:This is the most important thing that Nestl need to operation in Vietnam.Because the government requirements that any company, which wants tooperation in Vietnam, must have waste disposal systems in order to reduce the


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pollution. They need to use reasonable, saving natural resources, developclean energy, renewable energy and boosting recycling, reuse and wastereduction. Nestle applies to product lifecycle to attract the participation of allstakeholders, from farm to consumers in order to reduce the environmentalimpacts of products and activities company's business. Four priority sectors

are water, agricultural raw materials, production & distribution products andpackaging. They implement this policy through an EnvironmentalManagement System of Nestl.

Legal factor:o Safety and health:Nestl must product the productions which are safety and health for customersby using modern systems. Moreover, they also need to protect health andsafety of employees by buying insurance. Nestle also provides the productwithout melamine, which is effect on the health of customers, and follow strict

standards for milk production. They need follow the rule of food safety suchas the preservative concentration shall not exceed the permitted standards. Marketing segmentation:

A market segment will only be valid if it is worth designing and developing a uniquemarketing mix for that specific segment. The following questions are commonly asked todecide whether or not the segment can be used for developing marketing plans.

Can the segment be measured? It might be possible to conceive of a marketsegment, but it is not necessarily easy to measure it. For Nestle, they focus onchildren and their parents who have outlook be measured by market research.

Is the segment big enough? There has to be a large enough potential market to beprofitable. Because of the population in Vietnam is almost young population andthe main customer of Nestle is children so the segment is big enough that canbring the profit for Nestle.

Can the segment be reached? There has to be a way of getting to potentialcustomers via the organizations promotion and distribution channels. Nestleshould provide many promotion on its packaging. Furthermore, they need to showthe information of nutrition about the products. The main segment is parents ofchildren, who like to drink Nestle, so they need to know about which benefit thatNestle can provide for their child.

Do segments respond differently? If a customer is not responding to promotionalads for products or services that means Nestle is targeting the wrong segment. It isrisky to try to appeal to all segments simply because some are likely to beunresponsive. If no one responds, the revenue stream will end here. This is whyunderstanding market segments are so very important and Nestle should createcarefully a strategic plan suitable for the market in Vietnam.


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Can the segment be reached profitably? The most important aspects ofprofitability are the potential for market growth, the amount of marketcompetitiveness, and the available market access. This is very essential questionbecause profit is the one of important factors that the company needs to run ontheir business. They need to know how much profit they can receive from thissegment. In addition, they should know the identified customer needs, cost less tosatisfy than the revenue they earn.

Is the segment suitably stable? The stability of segment is important, if Nestle isto commit huge production and marketing resources to serve it. They do not wantthe segment to disappear next year. Of course, this may not matter in someindustries. Nestle is a big company, so they need to identify how long the segmentsuitably stable with the intention of investing the money for its business. Theyalso need stable market to maintain their profit and customers.

Target markets:For Nestle, they focus on concentrated marketing, which just provide the product for onesegment that is parents of children, and differentiated marketing which Nestle introducesseveral products versions such as Nestle Chuckie and Reni. Nestle had chosen two policyoptions which bring to them a large and various market in order to easy to provide theproducts for their customer. However, these options also bring some disadvantages. Forthe disadvantages of differentiated marketing are the additional costs of marketing andproduction such as more product design and development costs, promotion costs and soon. For the disadvantages of concentrated marketing is the business risk of relying on asingle segment of a single market.

Segmenting consumer markets of NESTL CHUCKIE: Segmentation by location: Chuckie is distributed all most in cities having many

customers who have income higher than countryside. Furthermore, the targetmarkets of Chuckie are middle and upon classes who living at cities. Chuckie alsofocus on the region which has hot weather because it provides the energy andsolves thirst for customers. For example, Chuckie gives out energy-releasingnutrients such as Protein, Carbohydrates, Fat, Thiamine, Riboflavin, Niacin,Vitamin B6 and Vitamin B12.

Segmentation by demography. Chuckie focuses on the children and teenagerswho would like to use chocolate flavor. Chuckie attracts customer not only for

boys but also for girls. Product usage segmentation: It focuses on the middle and upon classes who

would like to use the high quality products. Moreover, it focuses on children wholack of nutrition or vitamin and slow bone development because Chuckie alsobuilds up child's bones and makes them strong as it contains Calcium, Vitamin D,Phosphorous and Magnesium.


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Explain how buyer behavior for the products might affect the companys marketingactivities in the two different markets:

Whilst recognizing the fact that there are a number of alternative patterns of buyingbehavior, it is perhaps useful to consider the mental processes through which theconsumer moves when deciding to purchase a product. There are some factors ofconsumer buying behavior:

Need recognition:Nestle needs to do at this stage are determine the factors and situations thatusually trigger consumer need recognition .It means that marketers shouldresearch consumers to find out what kinds of need (need energy or thirsty), whenthe customer need the products (summer or after play sports) or problem arise,

what brought them about and how they led the consumer to this particularproduct. By gathering such information, they can identify main factors that mostoften trigger interest in the product for tailoring their products and services ordesigning promotion programs that involve these factors. Furthermore, Nestlealso applies some marketing activities such as checking periodic health likeNestl for global child health and The Phu Dong health, or applying principle60/40+ which provides nutrition to children. Moreover, they use famous personsuch as Dong Nhi and Noo Phuoc Thinh for promotion to attract fans of DongNhi and Noo Phuoc Thinh.

Information search:After a problem or need has been identified, the consumer begins searching

information for a solution. In order to getting information, customers oftenreceive the information from:o Personal sources: Customers will ask or receive advices from their family,

friends, neighbors and work colleagues. Therefore, Nestle should providethe best products in order to create a good experience for customers whocan share their satisfaction for their relationship. This will help Nestleattract customers and build a good relationship with customers. Forexample, Nestl 1000th anniversary of Thang Long-Hanoi with the peopleof Vietnam. This is activity marketing which introduces and suppliesinformation for new products.

o Commercial sources: They will get information from direct mail,salespeople, packaging, and displays. It means Nestle should have goodrelationship with suppliers who will share information for customer orprovide a good place for displays their products such as Nestle has somemarketing activities with Metrol and Big C in order to promote theirproductions. Moreover, Nestle should offer information not only by usingmail but also on the packaging. Nestle had applied a hotline (08)38126066for customers.


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o Public sources: They will search information on mass media or customerrating organizations. Consequently, Nestle has already used promotion oradvertisement for their products on TV, internet, radio, or newspaper toprovide the information its products. Furthermore, if they meet thesatisfaction of customers who will rate for the company such as they had

opened a website talk with Nestle which customers can vote for theproduction and give feedback to Nestle. Customers will rely on this toidentify the information.

o Experiential source: It means customers have already used Nestlesproducts by handling, examining, using the products or seeing the productin use. Nestle had cooperation with Big C for opening a show thatcustomers can use Nestles products without money.

Evaluation of alternatives:Consumers are likely to build up a set of brand beliefs about the position of eachbrand with regard to each attribute. The sum of these brand beliefs will make upthe brand image. Consumers will probably choose the brand that maximizes

benefits to them. In order to ensure that the brand has the best chance of beingchosen by the consumer, the Nestle has a range of options for action including thefollowing:

o Modifying the brand: It means if Nestle has a low the brand image, theymust to change, offer more of the attributes that the buyer desires in orderto get more satisfy and more profits. For instance, Nestle appliesStrategic brand new stage which is globalization gives them theopportunities to restructure the production process in a way morereasonable.

o Altering beliefs about the brand: It means when Nestle lost the trust or hasa low belief, they must to change the beliefs by providing good service

and products for customer. Moreover, Nestle also need to step up or moveup their trust with the purpose of let the buyer will recognize or knowabout its products and they will be trust. For example, marketing ofproducts which alternative breast milk in accordance with internationalrules of the World Health Organization (WHO Code) and the lawsVietnam or protect the environment or meet the standards of businessethics.

o Altering beliefs about competitors brands. This means Nestle mustcompare its brand with its competitors. They must to show that who theyare, what is the best its product to offer to customers such as price, quality,easy to use or support services and what make competitor lose. Forinstance, Nestle always not only provides more and more chocolate butalso supplies more nutrition and vitamin into its products or performanceprinciples 60/40+ . However, it does not mean that Nestle must destroytheir competitor by using bad strategy.

o Altering the importance weighting of attributes. It means Nestle would tryto persuade consumers to attach more importance to the product attributein which the brand excels in order to get the satisfaction of customers.


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o Calling attention to neglected attributes, particularly if the brand excels inthese attributes. Nestle needs to remind the customers how good theytaste. For example, Nestle always opens the show to introduce newproductions or promote and advertise its products on TV or Internet orinvest for its brand such as pictures group birds are the symbol of the

product.o Shifting the buyers ideals. It means Nestle would attempt to persuadeconsumers to change their idea level for one or more attributes. Nestleuses many marketing strategies and PR for changing customer thinking.

Purchase decision:Having evaluated the range of brand choices the consumer may have formed apurchase intention to buy the most preferred brand. The first factor is the attitudesof others such as friends or family of buyers can impact on their decisions eventhey already chose which product is the best choice. If Nestle provides goodproducts and uses word of mouth, customers will choose its products.Furthermore, they also need to use more advertisement and promotion to change

customers mind. The second factor is purchase intention which is also influencedby unanticipated situational factors that may intervene between purchase intentionand decision. Such factors could include a change in financial circumstances suchas redundancy, or circumstances in which some other purchase becomes moreurgent. For example, Nestle had opened the website www.trieunucuoixuan.comfor Nestl promotions or customers can use hotline (08)38126066.

Post purchase evaluation:Having purchased the brand the consumer will experience some level ofsatisfaction or dissatisfaction, depending on the closeness between the consumersproduct expectations and the products perceived performance. These feelingswill influence whether the consumer buys the brand again and also whether the

consumer talks favorably or unfavorably about the brand to others. Nestle needsto provide many good services such as providing V.I.P card, customers care.Moreover, they should build long term relationship or inform its customers bypromotion or provide feedback survey in order to develop their products and meetthe satisfaction of customers.

assignment 2abcd

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