The report focuses on basic understanding of marketing techniques performed by one of the prominent company named Nestle in Malaysia. It includes the several tools and techniques in developing a management of marketing operations. In order to analyse the management strategy, it must require appropriate interpretation of marketing management.
Nestle is known for its bestselling and manufacturing products in a sector of food and beverage. The company headquarter is situated in Vevey, Switzerland. From the time when the year of 1912, Nestle still holds a successful position in nurturing every Malaysians by its excellence services provided in its product (Urde, 2009). The Nestle considered as a trademark by a name of its products like Maggi, Nescafe and Kit Kat.
The history of Nestle trace from a year of 1866. The Henri Nestl?, the Swiss chemist founded the core theme of Nestle. He is considered as a founding father of Nestle Company and creator of the product called Farine Lact?e Nestl?, a condensed milk for babies who were unable to have mother feed at the period of infant mortality in the 18th century. In the year of 1867, Henri Nestl? implemented a new idea to his own coat of arms as a logo in 1867. The meaning the tag line in Nestle was little nest represented a concept of cherishing and caring, nourishment, security and family closeness. These characteristics are still considered as the guiding factor for the legacy of the Nestle Company as it achieves its assurance to 'Good Food, Good Life.'
The marketing of Nestle Company analyses on the basis of its following strength, weaknesses, opportunity and threat (Moura, Branco and Camoesas, 2015).
Strengths of the Nestle Company
- Matchless research and development competency- The Company expended billions on its Research and Development in the year of 2015.
- Presence of strong geographical segmentation to regulate diversified market in manufacturing and selling - The Nestl? Company regulates a highest selling of its product in approximate hundred and nine countries that is selling almost the whole world.
- Matchless assortment in product and brand – the Nestl? company portfolio is broader than any of its competitors in the market.
- Make a best Endeavour in providing sustainability in Environment – the Nestle putting every best possible measure to protect the realm of environment.
- Absolute Ownership on most of the identifiable products- the Nestl? having an absolute ownership in its most and recognizable products like Nestl?, Nescaf?, Maggi and Kit Kat. (Friesner, 2011)
Weaknesses of the Nestle Company
- The company faces allegation in a matters like improper usage of water, bonded labour and practising of several corrupt activities.
- Memories of contaminated product like Maggi in India- In the year of 2014, the company demolished a selling of adulterated Maggi noodle product in India. (Armstrong, 2010).
Opportunities of the Nestle Company
- Strong and correct marking specifying of any adulterated products- the researcher of marketing states that buyers usually purchase products by its clear description and accurate labelling.
- Clearness in sourcing- nowadays the customer having more and more awareness in finding out the source of materials used in a product.
- Increasing number in trifling food start-ups- the food start-ups is a significant step to boost the products by attracting next or young generation in foods and drinks.
- Exploring markets especially in coffee and tea -.although the company considered as a largest coffee vendor, it still lack in significant brands in coffee and tea market.
Threats of the Nestle Company
- Lack in eminent services of water – the scarcity of water treated as a most critical issue due to the factors of change in climate, over inhabitants, exploitation of natural resources and improper controlling of water. (Piper, 2014).
- Increased opposition in the sector of food and beverage – the company having a competitive rivalry in the industry of food and beverage. The industry of food and beverage running slowly in present time.
- The value of coffee beans might suggestively increase due to major environmental issues or tragedies- the company net’s profit completely depend on the generation of coffee.
Segmentation, Target and Position
Market Segmentation of Nestle
The marketing segmentation states the basic understanding of customers' requirements and satisfaction (Hassan and Craft, 2012). The Market segmentation requires searching of unmatched part of the market so that a proper segmentation can be provided by the company for the purpose of satisfying requirements of the majority of the customer (Sowey, 2010).
The following sources for segmentation are divided on the basis of customer’s choice
- Geographic area
Firstly, the segmentation of a product depends on the geographical factors like the selling of Nescafe coffee boost in the winters.
- Demographic area
Secondly, the segmentation depends on the product according to the demographic criteria. The criteria of demographic include the selling of a product in different ages of customers like cerelac, lactogen, attracts infant or young consumers.
- Psychographic area
Thirdly, the segmentation of the market depends on the factor of the life style and personality criteria. Such factor include in psychographic area. In Malaysia, kit Kat attracts consumers due to the taste of chocolate.
- Behavioural area
Fourthly, the segmentation depends entirely on the consumer behaviour. For example- the product Cerelac provide a nutritional level for infants. Such inclusion of nutritional level judged the consumer behaviour.
Target Marketing of Nestle
The targeting of the product considered as a second step after segmentation process in marketing. The targeting of the product evaluates the classification of segmentation and decides the quality and quantity of the product (Peck et.al.2013)
The company distributes the target marketing due to distinctive requirements and choices of consumer. The Nestle Malaysia classified their target strategy according to distinguish marketing policies such as Nescafe three in one product made especially for those consumers who are involved in hectic routine. Thus, the company provides targeting products according to the age, profession, seasonal time and weather of Malaysia (Baumgarth and Merrilees, 2013).
Positioning Strategy of Nestle
The positioning policy of nestle creates by its diversity of products, channels and differentiation on reputation, consumer’s choices or services. The company make a distinguish positioning on the basis of food processing such as it brings product like Nido with 25 kind of minerals in it.
The company able to focus equally on all three process of marketing that is segmentation, targeting, and positioning process. It able to conclude which categories of customers supports the products of the company (Kotler and Gertner, 2007).
The Nestle Company holds a close competition or rivalry with the companies like Cadbury, Parle-G and Amul. These companies are having strong market shares and more popularity in a public. The chocolate like Dairy milk holds a centre of attraction more than the kitkat, much or milky bar of the Nestle. Other product like amul dairy products contains a strong sell and demand in the market. Moreover, the medium of the advertisement is stronger of Amul, Parle-G, and Cadbury than the company of nestle.
Other strong competitors of the Nestle are Hershey’s, Mars and Pearson. The Hershey’s company is known as a largest American candy enterprise. The Hershey’s is also contains a largest chocolate company worldwide. The incorporation like Mars is a largest private firm of United States. The popular brands of Mars are star burst and a snicker holds a public choice. Salted nut roll and mint patty of Pearson Company have a highest revenue than the Nestle company.
It is recommended to the Nestle that to establish a strong advertisement policy like its competitors. There is an urgent need to introduce new healthy and flavorsome products to attract the largest number of customers.
4 P's Of Nestle
The marketing strategy of Nestle analyses on the universal principle of 4P’S that is Product, Price, Place and Promotion.
The company is the world’s largest industry of food and beverage. It focuses on the products according to its nature and characteristics such as dairy products are Nestle milk, Nestle slim and Nestle “Every Day Milk”. The strategy of Nestle products classifies mainly according to its nature. The nature of the product includes its quality and excellence, design scheme, specifications and its brand tag. For example- the nestle is able to provide the diversity in the food products like infant foods, breakfast products, beverage items like coffee and tea, kitchen utilising items, nutrition foods etc. The brand like Nestle captures a market only by its products superiority. The Nestle Company is able to stress on the proper monetisation of its product. Thus, it is significant measure of the Nestle to provide a permanent assurance and safety guidelines to its customers.
The general definition of the “Price” is the product worth in an exchange of its production and manufacturing. The term “Price” signifies that the company’s revenue in the market. Hence, the mechanism of the price is a significant tool in the marketing strategy for a purpose to establish the visibility of the competitors and customers. Further, the price of the product ascertains it’s a quality and excellence specification. It creates a judgment power in the customer to sought any product of its choice.
The company like Nestle focus mainly on the theory of “price orientation”. The price orientation deals with a competency to tackle current price issues in the market. The value of the products is depends on the excellence and superiority characteristics of the product. The value of the nestle products almost identical with the value of other rivalry in the market. Therefore the pricing strategy in the Nestle entirely depends on the factors such as the quality the product.
The place considered as a foremost element of marketing. The strategy on the factor of “place” mainly deals with the usable conditions of the company. The place targets the uniformity in the channel diversity of the company. Moreover, time and place is important segment into the production or manufacturing of any product by the company. The place of the company affects the entire business of the company. The nestle Malaysia having an excellence place strategy which able to attract consumers globally. In context of place, the company follows the strategy of FMCG that is fast moving consumer goods. Company monitors the effective system of product distribution in several places globally. In context of “Place” factor, the nestle company also promoting the electronic marketing so that the direct supplying of the product takes place to the customer without storing the product at any specific place.
According to Gertner (2007) the promotion is a main aspect of the marketing in which a customers’ choice can be determined. Promotion stimulates the core attention of the customer’s personal response and actions. The Nestle Company often come in a market with his unique techniques used for promotion. The promotion of the company always focuses on the consumer’s choices and needs. The company believes in pushing the excellent product quality and services. It successfully targets the consumer’s requirements. The techniques of promotion involve a smart approach or idea. For example- Kit Kat having an excellent tagline “take a break” which shows the good marketing skills of the company. The company is able to balance overall promotional strategy through the mode of advertising on Television, Posters, design and virtual advertisements over internet.
Key issues of the Nestle
The common issues and challenges of the nestle company are identified mainly on the following factors:
There is an urgent need to “Innovate and Renovate” the nutritious and safe products in order to curb the existing health issues in the society. These health issues mainly are obesity, malnutrition and other disorders or deficiencies in any individual’s customers. Even the time has changed today, customers are opting more healthy and nutritive products. The competitors of the Nestle are good in handling the current approach of the customers. The products of Amul or Cadbury are catching good eye in terms of the customers’ health. For instance- the dairy products of the Amul are very popular in the customers as it is providing healthy and nutritive dietary supplements in it. Hence, the Nestle Company requires stressing the current perspective of the customer’s choice and must ensure meeting all the fundamental priorities of health and wellness of its customers.
The Nestle Company requires a more productive and effective policy and scheme on “Strict Responsibility towards an Environment”. It must compliance respect to environment. There is a serious issue or a challenge facing by the company is the scarcity in the water conservation. The company must target the proper monitoring on the water usage in context of environmental aspect. It must ensure the transparency and proper traceability of the eco-friendly technology for the production or manufacturing the products. There must be proper installation of the environmental techniques like biotechnology and nanotechnology. It should contain a proper execution of the fair policies and schemes for the healthy and safe environment. It should focus on promoting the environmental methods in every level of the production units. Every employee must be concern for the environment rather than its own individual profit. Therefore, awareness plays a significant role in curbing the environmental issues at every level of the company.
Marketing strategies of the Nestle
The marketing strategies of the Nestle form its core existence in the market. These strategies are able to attract a number of customers due to its strong marketing campaigning. The Nestle company mainly focus on the strategy of “Think globally, act locally” where marketing channels is enhanced at both national and international level. It targets the uniformity in the distribution and supply chain of the products. In order to establish the proper accountability and transparency in the distribution of products, the Nestle introduced the strategy of “Answerable Sourcing”. The sourcing aids in promotion of environmental welfare.
The Nestle Company has a strong brand value which ultimately helps in strengthen its sales and economical strategy with ease accountability. The general rule of the sales marketing in the company follows with a principle of “creative innovation”. The factor of creative innovation deals with a factor to increase numbers of the customers due to its quality and excellence feature inbuilt in the products of it.
Best illustration of the marketing strategy provided by classification on “Micro Environment” and “Macro Environment”. The strategy of Micro Environment deals with an internal environment of the company. Such internal environment includes a proper uniformity and balancing in the relations of the employee and labours. While the macro environment deals with external factors where a proper balancing and uniformity based in the context of political, social or economic aspect with a competitors of the market.
Therefore, the marketing strategies of the Nestle Company recommended that the company must meet the current requirement or demand of the customers to establish the strong position in the market. To stretch more accountability and transparency in the marketing strategy, it is recommended that Nestle should disclose the public knowledge and awareness in it. Thus, the theme of brand line “good food, good life” is able to furnish practically all the requirement and core objects of the Nestl?’s marketing strategy.
Marketing orientation of the Nestle
The concept of marketing orientation deals with a study of philosophical aspect in order to target and discover the basic needs and choices of the customer through the product. Generally, the reaction of the customer is evaluated on the usage of the product. The Nestle company follows the market orientation classifies on the basis of “strategic marketing” and “operational marketing”. The strategic marketing deals with an “implementation of the strengths of the company that is nestle company holds a strong brand tag where nestle putting all innovative strategy to attract its customer. While, the operational marketing deals with a practical implementation in the products quality and design where nestle is able to provide prompt customers services by its excellence and superiority specification in it.
Corporate Social Responsibilities of Nestle
Every Corporate are obliged to comply with code of ethical, legal, and commercial. This is a general principle that every business has to implement in order to meet expectation of the public.
The policy on Corporate Social Responsibility (CSR) plays a vital role in the marketing. The
Corporate Social Responsibility described as a concept of broadening social factors in the marketing strategy (Gayo, 2012). The policy of CSR includes ethical or social norms in the marketing. It refers as an implementation of ethical principles by an organization in order to improve social disorders. Thus, Corporate Social Responsibility is generally company policy to accomplish a balance of financial, ecological and societal imperatives.
The CSR Policy of Nestle creates value for society by its contribution in improving the nutrition, health and wellness through its products and services. The tagline of Nestle Malaysia is “Nestle nourishing” in order to achieve complete wellness and delivering promise to carry “Good food, Good Life” to all citizens of Malaysia. The fundamental principle of the Nestle is based on the principle of transparency and ethical codes and conduct. The Nestle CSR policy provides a three zone mainly focussing (Polonsky and Jevons, 2009). The three zones are
- Creating a shared value- it is considered as a core theme of Nestle CSR policy which aims to introduce different and countless value for society. It includes company mainly focuses on nourishment, water and overall development of public at large.
- Sustainability of Environment- the company puts equal effort to enhance the environmental values day by day. Such sustainability deals with a motto to provide healthy and green environment. The company forms a several protocol in order to implement long term approach in the conservation of the environment.
- Compliance- the Nestle respects every norms or standard in regard to legislation, principles of business affairs and other regulatory codes of conduct.
Hence, it is proved that the company playing well in a social front as it is observing all practices of a business and influence directly on the nation’s economy, community.
It is recommended that Nestle CSR policy should apply the human right policy across the globe. It is highly recommended that company should provide an assurance to its every employee that they are provided with adequate wages and extra wages according to their potential and capabilities. It is important step to encourage the hand working labor of the company. One must be provided with equal attention to its requirements and needs. The laborers should entitle to attain an equal pay with equal work and right to work with dignity (Shaw, 2007).
The company should focus on banning child labor and forced labor. The humanity should be the core theme of the company. Such human rights policy should straightaway preserves the all basic needs of the employees as well as consumer’s needs and requirement. The business of the company should not compromise the needs of the public at large. The company should warrant and encourage that every unit of a company observes the codes of the human right policy with honesty and responsibilities.
The report on the Nestle Company concludes that the company is one of the successful brands in the world. In the present time, the company is putting an innovative idea in the industry of food and beverage and acquires a dominating position in the market. The consumers of nestle hope that nestle preserves constantly a quality products with the unique presentation of marketing methods (Azimont and Arauj, 2007).
The company often putting a best endeavour to spread its product among every unit of markets either of big or small markets. The company keeps focussing especially in the rural marketing and to those remote areas where people are unable to consume products at a best quality (Witkowski, 2007).
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