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Introduction

Nestle began in Switzerland in the mid 1860s when founder Henri Nestle created one of the

first baby formulas. Henri thought the need for a healthy product to serve as an alternative for

those mothers who could not breastfeed their babies. Henri’s first product was a mixture of

cow’s milk, flour and sugar which was called Farine Lactee Henri Nestle. In a few years the

first product of Nestle captured market in Europe.

In 1874 the Nestle’s Company was purchased by Jules Monnerat and developed its own milk

to compete the Anglo-Swiss Condensed Milk Company.

At the start of First World War it was difficult for Nestle to buy and distribute products. But

to maintain up with the high demand for milk and dairy product Nestle purchased many

factories in the U.S via government contracts. At the end of the war the production of the

company was doubled and when the fresh milk came to the market after the war , Nestle was

suffered down into debt.

1905-1918

In 1905 the Company formed merger was called the Nestle and Anglo-Swiss Milk Company.

After getting an agreement with the Swiss General Chocolate Company, Nestle added

chocolate to the food product.

1938-1944

The effects of the onset of World War II were felt immediately by Nestlé. Profits

dropped from $20 million in 1938 to $6 million in 1939. Neutral Switzerland became

increasingly isolated in a Europe at war, and the Company transferred many of its

executives to offices in Stamford, Connecticut.

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The first truly global conflict ended forever the traditional Company structure. To

overcome distribution problems in Europe and Asia, factories were established in

developing countries, particularly in Latin America.

Ironically, World War II helped speed the introduction of the Company's newest

product, Nescafe. After the United States entered the war, Nescafe became a staple

beverage of American servicemen serving in Europe and Asia. Annual production

levels reached one million cases by 1943.

As in World War I, production and sales rose in the wartime economy: Nestlé's total

sales jumped from $100 million in 1938 to $225 million in 1945. As the end of the war

approached, Nestlé executives found themselves unexpectedly heading up a worldwide

coffee concern, as well a company built upon Nestlé's more traditional businesses.

1975-1981

Nestlé’s changed their position after the agreement with L`Oreal in 1974. Nestle got high

growth in the developing country but partially offset a downturn in the traditional marketing

and also take the risk engaging with economic conditions.

Nestle baby milk

The Baby Milk issue

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In 1973 for the first time about Nestle’s marketing strategy was written in New

Internationalist magazine and in a booklet called The Baby Killer, published by the British

non-governmental organisation War On Want in 1974.

There are several problems when some poor mothers start this formula instead of breast-

feeding. Such as baby milk formula must be mixed with water, which was normally happened

in developing countries. These problems were leading to many diseases because of the

illiteracy in the developing countries. Many people claim that this milk formula is a cause of

the death instead of breast-feeding.

Nestle’s mission

General Manager of Nestle, Arthur Furer stated, it is important to develop an effective

counter-propaganda against the baby milk. For this we need the promotion of budget to

$8billion, for the first time Nestle got advantage that produce breast milk.

Nestle is trying to bring those foods for consumers which are of high quality, safe and the

physiological needs. The aim of nestle is to meet the requirements of the customers all the

time with a high quality.

“Nestle is dedicated to providing the best foods to people throughout their day, throughout

their lives, throughout the world. With our unique experience of anticipating consumers'

needs and creating solutions, Nestle contributes to your well-being and enhances your quality

of life.”

Nestle is not only Switzerland's largest industrial company, but it is also the World's Largest

Food Company. The mission statement emphasizes on the fact that Nestle products are

available in nearly every country around the world. Wherever one may live, only Nestle can

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provide the best and a good quality food and drinking products to meet the customer needs

and demands.

They are often reassured that they will find well-known brands out of home.

This statement also reflects the image of high quality products that Nestle offers. Nestle has

the benefit that it offers caterers, fast food chains and other restaurants of high quality, base

products and meal components, as well as consumer brands. Every day millions of people all

over the world

Every day, millions of people all over the world

show their trust in the company by choosing Nestle products. This trust comes from a quality

image that has been built up for over a century. Therefore,

the quality of the products ultimately enhances the quality of the consumer’s life.

Nestle is struggling to maintain the position as in the past. For this purpose Nestle is going to

launch a new product and gain the value once again in the marketing in coming days.

In addition, the mission statement declares that Nestle has the ability to anticipate “…

consumer’s needs and create solutions….” Nestle has

proven this ability a number of times by introducing new products that were required by

consumers. Especially, the launch of Nestle Pure Life in

Pakistan proves the accuracy of this fact. In Pakistan, there was a need for safe and healthy

drinking water and Nestle responded to this consumer

need by introducing Nestle Pure Life.

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SWOT Analysis

Strengths

The biggest strength of nestle is it includes team focused and good policy. Nestle looks on

collective and oriented employees to work hard. And second thing is Nestle has a big brand

name because of their high level of market share and the trust of the people from all over the

world. Nestle is trying all the time to achieve bigger volumes by renovating existing products

and innovating new products. Because of low cost operators by which Nestle not only

compete with others but also taking ahead.

Strengths are internal factors. For example, strength could be your marketing expertise.

Weaknesses

One of the major weaknesses of Nestle is Nestle Baby Milk because those babies who fed on

baby milk are become sick. And so many babies were died because of nestle baby milk and

then people boycott to buy nestle.

Weaknesses are internal factors. For example, a weakness could be the lake of new product.

Opportunities

Opportunities are external factors, for example developing a distribution channel such as the

Internet; change in the lifestyle of consumer is possible to increase the demand for a

company’s products.

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Threats

A threat could be a new competitor in an existing market or a technological change that

makes existing products possible out of date.

PEST Analysis:

The main theme of PEST analysis is to measure market potential and situation, by indicating

growth or decline. PEST analysis can be used for marketing and business development

assessment and decision-making, and the PEST analysis encourages proactive thinking,

rather than relying on habitual or instinctive reactions.

Political analysis:

Nestle’s baby milk can be affected by political change in several different ways i.e. political

change can influence public priorities and funding arrangements. Nestle has to operate within

the framework of laws set by Parliament, and that’s why it depends on political

considerations.

Government plays vital role by imposing the law and regulation on the companies.

Government set standard laws for companies that has to met otherwise they have to pay fines.

Nestle is trying to met all the standard laws which are set by the government. For example

Health and Safety Act, Disability Act but unpportunetly Nestle break the law. Government

laws and regulation in accounting standards, taxation requirements, including tax rate

changes, new tax laws and revised tax law interpretations are highly influenced on Nestle

business.

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Nestle is also very keen about stability of government stability in countries where they are

trying to get in (especially in underdeveloped countries where political stability is at

risk).They are also subject to state, local, foreign environmental laws and regulations.

Economical Environment: 

Nestle needs to have enough information about the country inflation rate, economic growth

rate, and national per person capital income, in which they are willing to start their business.

Economic condition varies from country to country. Before starting the baby milk has focus

on the above factors. These are the factors that Nestle has to consider before setting corporate

objectives. Global economic turmoil has major influence on Nestle business because

customers are spending less and they have to adopt different strategies in order to run

business smoothly.

Social analysis

Social or cultural environment had great impact on Nestle. The main focus of social/ cultural

includes the Social change involves changing attitudes and lifestyles. The social and cultural

environment is constantly changing. Different countries had different culture (language,

religious beliefs, food, family, clothing and their lifestyle). Nestle has to developed strategies

which are according to belief and culture in multicultural country like UK. Every country has

different consumer taste and lifestyle and Nestle has to develop effective strategies in order to

met different lifestyle consumer behaviour. Company is totally dependent on the consumer

lifestyle and their attitude. Product or services cannot be successful until company has

enough information about the consumer lifestyle. Nestle has to take social and cultural factors

under consideration in order to achieve their strategic objectives.

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Technological:

Technological change has the most rapid, persistent and profound effect. It creates

opportunities for new products and product improvements and of course new marketing

techniques- the Internet, e-commerce. Technology creates opportunities for new product or

product improvements and new techniques of marketing such as internet and e-commerce.

Technology has great influence on business operations and overall decisions. Nestle uses

technology by taking orders via telephone and online by internet. Moreover, Nestle uses

technology in various business activities such as record of their customers and employees.

Corporate Objectives

For any firm it is important that corporate objectives are consistent with the overall marketing

objectives. Taking corporate objectives and strategy, a company might want to give a

description to the Ansoff’s Matrix, Boston Matrix to establish that where the company is and

in which way it wants to lead.

Nestle’s corporate objective is one of the world best and largest branded food industry. It is

very important that the corporate objectives are fully practical for each product line with the

overall objectives of the firm as a whole.

Marketing Objectives

Nestle can set marketing objectives in the business for their product and also for their profit

centres. The primary objectives for baby milk to improve its position as the world’s number

one selling product. To achieve this position Nestle has to develop a marketing strategy,

product development, distribution and promotion. For the improvement of a baby milk these

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strategies must be flexible and at the same time it is important to take care and avoid the

damage of the product.

Ansoff’s Matrix

In the business Ansoff’s Growth matrix helps to decide the growth of product and market

strategy. We can suggest by Ansoff’s Growth that product or market depends on whether in

new or existing markets.

Market Penetration

Market penetration means that a growth strategy where the business emphasis on selling

existing products into existing markets.

By market penetration main objectives can be achieved.

1: By maintaining and increasing the current product’s market share, this can be achieve by a

mixture of attractive pricing strategies, e.g. sales promotion, advertising

2: Secure production of genetic feature of growth market.

3: Spread usage of regular customer, for example by loyalty schemes

Market Development

In marketing development we can sell the existing products into new markets. To approach

this strategy there are so many ways, including

For example exporting to a new country, new packaging, new distribution channels, pricing

policies to create new market segments.

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Product Development

Introducing a new product into existing marketing is known as product development. This

strategy may require the development of new competencies and requires the business to

develop modified products which can appeal to existing markets.

Diversification

Diversification is the name given to the growth strategy where a business markets new

products in new markets.

This is an inherently more risk strategy because the business is moving into markets in which

it has little or no experience.

For a business to adopt a diversification strategy, therefore, it must have a clear idea about

what it expects to gain from the strategy and an honest assessment of the risks.

Competitive Strategies

1: Cost Leadership Strategies

Companies can acquire competitive advantage via a cost leadership strategy. This is usually

gained by companies that are able to achieve economies of scale in production and

marketing. Such companies buy raw materials in bulk and they produce on a large-scale.

They are thus able to market at low prices and this is usually to the mainstream food retailers.

France and the UK have organic juice companies that have gained market leadership via this

strategy. Conventional juice companies undertake this strategy in the organic juices market

because of their large production capacity and established contacts.

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This strategy is not viable for new entrants that have low financial resources and specialised

products.

2: Differentiation Strategy

A differentiation strategy involves companies marketing a product that is clearly

distinguishable from others in the marketplace. In the market, this means the product has

attributes that are distinct from others, which can be in the form of flavour, juice type or other

characteristics.

Examples of companies undertaking this strategy are those that specialise in Not From

Concentrate (NFC). Competitive advantage is gained by these products positioned differently

from those that compete on price (-Cost Leadership Strategy).

3: Focus Strategy

Whereas the previous two strategies are industry-wide strategies, this involves a segmentation

approach. This strategy involves companies focusing on specific segments of the market, and

segments can be in terms of flavours, juice type, or marketing channels. Competitive

advantage is gained via a Cost Focus or a Differentiation Focus.

A Cost Focus strategy involves a company gaining competitive advantage by being the low

cost provider to the segment.

A Differentiation Focus strategy involves companies marketing a distinct or unique product

in the target segment.

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Application of 7P’s

1: Product: A product must provide value to a customer but does not have to be tangible at

the same time. It introduces a new product or improving the existing products. New product

development refers to the ability of an organisation to introduce new products into the market

sometimes referred to as innovation.

A new product takes time to find acceptance and there is a slow growth in sale. Until cost is

high because of low output and process may be high to cover production and sales promotion

costs. The company needs to spend heavily on promotion to inform the target market about

the product existence and benefits.

At decline stage many producers are reluctant to leave the market despite falling profit. When

the demand is greater for the product sell it in international market.

2: Price: This implies that the price should be set based on what the competitor are charging

in the market. The method for setting prices should based on demand, because when demand

is high the price will be high and low demand may lead to a low price. Pricing strategy for a

new product for the first time lead to a high price for those buyers who are ready to pay a

higher price and then after some time reduce the price.

3: Place: It refers to the place where the customer can buy the product and how the product

should be reach there. This can be done through different channels like wholesalers, Internet

and retailers. The channels of distributions based on intermediaries and middlemen who serve

as links between the user of the product and the manufacturer.

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4: Promotion: It is about the benefits of using a service and a particular product. It includes

many ways to dealing with customers for which the company has to offer. The purpose of

promotion is explained by the best way which is DRIPE model.

Differentiate- it means that the product must be unique from others.

Remind- the customers have short memory so in this case we should remind those customers

who use it before means the regular customers.

Inform- who are not using the product and unaware about the benefits of the product and

have never used before we will inform those people.

Persuade- it means convinces and motivate the people about the product.

Engage- in the last part of the dripe we will maintain a long term relationship with our

customer.

5: People: People refer to the management, employees, customers and everyone who are

involved in it. In this part of 7p’s the selection of employees should be done with careful and

also the selection of policies is very important so all the members should be aware of these

information. And establish effective policies and effective motivational programmes.

6: Process: It talks about the process of providing a service in which the marketer’s task is

achieved and should have the knowledge about the service which provide to the customer, are

helpful to the customer, the time of delivery and the customers are informed about the

service.

7: Physical Evidence: It refers method of using a service and product. The physical evidence

relates to those aspects that customers can feel and see. For example pamphlets, logos, labels,

packaging, colours

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Action

After doing marketing strategies and tactics, it becomes necessary to turn them into action

plans.

For each strategy outline the steps involved in actioning the strategies, and allocate

responsibility with a time frame (start date and completion date).

GANTT CHART

Marketing Activities Time

JFM AMJ JAS OND

Responsibility Budget

Advertising ↔ ↔ Advertising Executive 30000

Product Launch ↔ Production Council 40000

Sales Promotion ↔ ↔ Sales Director 20000

Market Development ↔ Market Researcher 30000

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Monitoring and Control

After the implementation of marketing plan the duty of managers are to monitor and control

what is going on.

Outline controls that need to be put into place prior to executing your marketing plan. These

controls will monitor your strategies to ensure you are meeting your set objectives and

financial targets.

In monitoring it is to be checked that everything is going in the right direction according to

the plan. In control the correction of the wrong plan as early as possible.

Individual Critical Reflection

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www.englishteastore.com/nestle-history.html - United States

www. nestle .com/Resource.axd?Id=4FF18A81-0D77-43B4-949D .

en.wikipedia.org/wiki/Nestlé

projectsera.blogspot.com/2009/.../marketing-plan-of-nestle.html

info.babymilkaction.org/pressrelease/pressrelease23apr10 -

www.articlealley.com › Baby & Child

www.thetimes100.co.uk/case-study--long-term-maintenance-classic-brand-name--7-92-4.php -

ivythesis.typepad.com/.../writing-marketing-plan-assignment-essay-instructions.html -