Marketing Strategy of Nestle

BBA lllAli Raza

14-Arid-4830

Contents• Introduction to Nestlé• Business Portfolio & Growth Strategies• Marketing Environment• Market Segmentation & Positioning Strategy• Marketing Mix of Nestle• Advertising Strategies• Conclusion

Introduction• Food and beverage company • Headquartered in Switzerland• Ranked #72 on the Fortune Global 500 in 2014• Nestlé’s products include baby food, bottled water,

breakfast cereals, coffee and tea, confectionery, dairy products, ice cream, frozen food, pet foods, and snacks.

• Twenty-nine of Nestlé’s brands have annual sales of over CHF1 billion (about US$1.1 billion)

• Nestlé has 447 factories, operates in 194 countries, and employs around 339,000 people.

History

• Henri Nestlé established Nestlé in 1867 in Switzerland (Vevey HQ)

• His first product was lactogen formula for  infants by the name “Farine Lacteé”

History ( logo evolution )

1875

1938

19881966

History• In September 1866, in Vevey, Henri Nestlé developed milk-

based baby food.• In August 1867, Anglo-Swiss Condensed Milk Company was

established.• In 1875 Henri Nestlé retired. but the company, under

ownership of Daniel Peter , retained his name as Société Farine Lactée Henri Nestlé.

• In 1877, Anglo-Swiss added milk-based baby foods to their products. In the same year Nestlé Company added condensed milk to their portfolio.

• In 1904, Both companies participated in the creation and development of Swiss chocolate and Nestle marketing the first chocolate - milk Nestlé.

• In 1905, the companies merged to become the Nestlé and Anglo-Swiss Condensed Milk Company and retaining that name until 1947.

• In 1947, Merger with Alimentana S.A. (Maggi) and company named as Nestlé Alimentana S.A. 1971.

• In 1974, Become stakeholder of L'Oreal .• 1977 Acquisition Alcon Laboratories Inc.• 1985 Acquisition of Carnation• 1988 Acquisition of Rowntree• 1990 Cereal Partners Worldwide

• 1991 Beverage Partners Worldwide• 1998 Acquisitions of Spillers Pet foods• 2002 Acquisition of Ralston Purina• 2002 Acquisition of and Chef America and merger into

Dreyer’s• 2002 join Cadbury and purchased American company

Hershey's• In December 2005, Nestlé bought the Greek company

Delta Ice Cream for €240 million.• In January 2006, it took full ownership of Dreyer's Grand

Ice Cream Holdings, Inc• In November 2006, Nestlé purchased the Medical Nutrition

division of Novartis Pharmaceutical for US$2.5 billion.• 2007 Acquisitions of Ovaltine

• In April 2007, Nestle bought US baby-food manufacturer Gerber for $5.5 billion.

• 1 March 2010 , Bought Kraft’s Food (Frozen Pizza) for $3.7 billion

• In February 2013, Nestlé Health Science bought Pamlab.• In February 2014, Nestlé sold its PowerBar sports

nutrition business to Post Holdings, Inc.• In December 2014, Nestlé announced that it was opening

10 skin care research centers worldwide• 2015, opening of Education and Longevity Development

(SHIELD) centers

Name Nestle S.A

Logo

Industries served Food ProcessingGeographic area served

Worldwide

Headquarters SwitzerlandCurrent CEO Paul BulckeRevenue CHF 92.2 Billion (2012)Profit CHF 10.6 Billion (2012)Employees 328000 (2012)Main Competitor Unilever VN, Hershey Foods, Kraft Foods,

Cadbury Schweppes, Group Danoe

Nestlé in Pakistan

• Nestlé Pakistan Ltd. is registered on Karachi and Lahore stock exchanges.

• Established its first production unit in 1988 in Sheikhupura named as Nestlé Milkpak Limited. Now Nestlé Pakistan Ltd.

• Headquarter in Lahore• Multi Product Factories in Sheikhupura, Kabirwala, Karachi• Water Factories: 1 in Islamabad , 2 in Karachi

Mission Statement

• "We strive to bring consumers foods that are safe, of high quality and provide optimal nutrient to meet physiological need. Nestle helps provide selections for all individual taste and lifestyle preferences.“

• Motto: "Good Food, Good Life."

Vision Statement

"Nestlé's aim is to meet the various needs of the consumer everyday by marketing and selling foods

of a consistently high quality."

Organizational Hierarchy:

REGIONAL MANAGER

SALES ADMINISTRATION

EXECUTIVE

AREA SALES MANAGERS

TERRITORYINCHARGES

SALES DISTRIBUTION

STAFF

ZONAL MANAGER

NATIONAL MANAGER

Organizational StructureNational Sales

Manager

Constomer Service

ManagerArea

ManagerSystem Support

Executive

Event Manageme

ntSystem Support Officer

Event Management

Officer

Chiller Technician

Sales Associates

DSR Loader

Zonal Sales Manager

Regional Sales Manager

Constomer Service

Manager

Territory In-

Charge

Portfolio

(Beverages)

• Nescafé• Nespresso• Nesquik• Milo• Nescau• Nestlé Pure Life • Deer Park • Vittel• Nestlé Aquarel

Milk products, nutrition and Cream Products

• Nido • Nespray • La Lechera • Carnation

Prepared dishes, cooking aids and pet care

• Maggi• Stouffer’s• Buitoni• Herta• Thomy• Crosse & Blackwall• Winiary• Friskies

Chocolate, confectionery and biscuits:• Kit Kat• Smarties• Lion • Crunch• After Eight• Polo • Cailler• Butterfinger• Orion• Caja Roja• Sao Luiz• Star

Cosmetics

• L'Oreal

BCG Approach

Question MarkDon’t know what to do

with Opportunities;Decide whether to

increase investmentMagi 2-minuts noodles

StarsDoing Well,

Great opportunities

Mineral Waters Brands: NPL

DogsWeak in Market,

Difficult to make Profit

Power Bar, Lean Cuisine

Cash CowDoing well in no growth

market with limited opportunities.

Nesquit

Mar

ket

Gro

wth

High

Low HighMarket Shares

Growth Strategy

• Transnational strategy : Low cost, Different products, Different Markets, High local responsiveness

• Localization strategy : brand name resonates locally as the cultural habits difference in different nations

• Customization : delivering goods that are modified to satisfy a specific customer need. 85 percent of the market for instant coffee in Mexico. 66 percent of the market for powdered milk in the Philippines

SWOT Analysis

Strength Weakness Product diversity

Acquiring and merger

Criticism

Incident in India

Opportunity Threats Building partnership Broad Sale Channel Changing trend

Raising Prices of Raw materials

Marketing Environment

• Micro Environment: a) Suppliers: Suppliers provide the raw material resources,

unfinished goods and labors to the company in order to produce goods and services

b) Marketing Intermediaries: The market intermediaries of the company help to advertise, sell and distribute its product to the end customers.

c) Customer: Immediate customers of Nestle are retail and grocery stores

d) Competitors: Petra Foods Limited, Yeo Heap Sang Limited, Mail Dairy Industry Co. Ltd

Marketing Environment

• Macro Environment:a) Political Environmentb) Cultural Environmentc) Economic Environmentd) Technological Environment 

 

Market Segmentation

• Geographic• Demographic• Psychographic• Behavioral

Geographic Segmentation

• Weather: Nescafe Ice: Summer Nescafe Classic: Winter

Demographic Segmentation

• Age: Lectogen: Lactogen 1 is for babies less than 7

months Lectogen 3 Is for babies below 12 months Cerelac: For under 1 year baby Nido: For children of 2 year

Demographic Segmentation

• Occupation: Nescafe Classic: For those who work hard• Income: Nestle segmented their market based on customer's

earnings in an effective way

Psychographic Segmentation

Life style and personality: • Nestle provides KIT KAT these people who really want to

enjoy chocolate. • Nescafe 3 in 1 is for exclusively those customer’s who are

really busy and do not have enough time.

Behavioral Segmentation

Benefits:Cerelac: For those customers who want more benefits from the

products Cerelac contains vitamin, mineral and all nutritious

elements for babies

Target Marketing

Undifferentiated: Nescafe 3 in 1 * Maggi noodles * Kit KatDifferentiated:• Koko Krunch, Nesquick: Chocolate milk who want to get taste

of chocolate.• Nescafe Ice: Cold coffee for the people in hot weather.Concentrated: Nestlé specializes in producing baby foods

Positioning Strategy

• Product Differentiation: Nestle brings a lot of product for target different customers. As they provide 25 types of minerals in Nido for children.

• Channel Differentiation: Nestle reach their products to the customers through their expert market salesman and transportation. So that their products are much available to their respective customers.

Positioning Strategy

• Image differentiation: Nestlé’s logo is totally different from its competitors that are greatly accepted by its customers.

• People differentiation: Nestle has a large number of employees that are highly educated and trained.

• Service differentiation: better service for its respective customers from its competitors, 24 hours hot line service

Marketing Mix

P Product P Price

P PromotionP Place

Marketing Mix

Advertising

• Nestlé is doing the selective demand advertising that is intended to stimulate demand for individual brands.

In the advertisement of NPL the message is given that, There is one water, which gives you, hope, happiness and trust and that water is Nestlé Pure Life. It is pure, safe, and

healthy water.• Slogan of NPL : JIYO! Kay yehi hay zindagi.

Advertising

• Sales Promotion:• Public Relations:• Publicity:

Conclusion:

The advent of consumer food products has brought a immense change in the field in the consumers food habit. Nestle has done well to enhance its customers loyalty operating as a market challenger in its industry. Nestle is one of the largest food processing company. Their products and quality mainly depends on their experience and efficiency. Nestle believe on quality that leads to good business and good development. It has segmented the market based on certain clustered preferences deploying multi-stage segmentation approach to meet individual needs of the customers. Offering new products would also close its existing products gaps to a great extend ensuring satisfaction and loyalty.

• In our report, we try to present the Marketing Strategies through segmentation, target marketing and positioning of Nestle

Bibliography

• http://www.academia.edu/• http://www.marketing91.com/• https://en.wikipedia.org/• www.slideshare.net/• http://www.nestle.com/• http://www.strategicmanagementinsight.com/• http://bib.kuleuven.be/• www.gotabout.info/

Thank You