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Market positioning management in the environment of Nestle

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MARKETING
MANAGEMENT

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Executive summary
The competition in the confectionery industry has increased to higher levels. In such
environment it is crucial that products such as Kitkat must check the way they are marketing
themselves in the market. This report analyses the situation of the environment of Nestle at
the global levels where it is found that due to the increasing instability in the developed
country company should focus on developing and under developed nations. Strategies that
are currently used by the company and their internal strengths and weakness have been
highlighted. It was found that company is capable of making higher sales taking help of its
financial strength and brand name. It was found that products such as Cadbury, mars and
Ferrero Rochers are giving tough fight to Kitkat. Company new focus on innovation and
should also give priority to innovative technologies in the coming years so as to perform
different marketing activities.
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Contents
Executive summary...............................................................................................................................1
INTRODUCTION.................................................................................................................................2
Main Body.............................................................................................................................................3
Situational analysis............................................................................................................................3
External environment....................................................................................................................3
Marketing strategies......................................................................................................................4
SWOT Analysis.................................................................................................................................6
Competitor’s analysis........................................................................................................................8
Marketing plan..................................................................................................................................9
Marketing mix...............................................................................................................................9
Action plan..................................................................................................................................10
Monitoring and feedbacks...........................................................................................................12
Budget for marketing...................................................................................................................13
Recommendations...............................................................................................................................13
CONCLUSION...................................................................................................................................14
REFERENCES....................................................................................................................................14
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INTRODUCTION
Marketing has become one of the most essential functions in the business. Success of the
organisations depends on the way they have marketed their products or services. All the
departments and functions works with the marketing departments so as to achieve the
common objectives. There is intense competition in the industry and in such an environment,
marketing plays a crucial role in the making an edge over the rivals. Both digital and
traditional marketing techniques are used by the organisations to ensure that they reach to
maximum possible customers. It is also crucial that firms analysis the situation of the market
and makes strategies accordingly. For this it is crucial that company analyses its external
environment (Kotler, et al. 2015). It is also crucial that companies analyses the strengths and
weaknesses they have. It is necessary for making the marketing plan. At the same time, it is
crucial that firms analyses what their competitors are doing. This is essential for reducing the
chances of failures. Nestle is a Swiss food and drinks company operating in different parts of
the world. In terms of revenue it is the largest food company in the world. This company
deals in the business of breakfast cereals, dairy products, tea and coffee, medical food, bottled
water, baby food, frozen food, snacks, pet foods, confectionery and ice creams (Nestle,
2019). Its confectionary business has been successful in different parts of the world especially
the chocolate products. Kitkat has been its one of the most successful products in different
markets. This is a wafer bar confection known for its taste. Due to highly competitive
products by the competitors, it is essential that company redesigns it marketing for its
chocolate products.
This report provides a marketing plan for Nestle while analysing its internal and external
environment. It also produces a competitor’s analysis and hence produces the marketing
strategies that can be made by the company so as to gain advantage in the market.
Main Body
Situational analysis
External environment
In the competitive environment, it is crucial for the firms to understand the situation in the
market. For this it is crucial that company analyses its external environment so as to

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understand the factors that are producing challenge for the company’s product. Some of the
factors in this regards are:
Political: There is lot of political instability in different parts of the world and governments
are taking decisions that might affect the investments plan of Nestle. Decision such as Brexit
will have impact on its sales in the European market. The increasing conflict between the big
super powers of the world is putting pressure on these companies to select the best trade
routes. Governments are forcing these companies to invest in their country (Izberk-Bilgin and
Nakata, 2016). On the other hand the implementation of GST in the countries like India
which is one of the biggest consumer countries of this company has made the trading easier.
South Asian countries like Malaysia and others are easing their trade rules and hence it
provides opportunity for Nestle to grow within these countries.
Economic: In a last decade world economy has seen many hiccups. From poor performance
of the European market to slow down in the American economy, economic barriers for Nestle
have enhanced. This is having the effect on the sales of the confectionary products and people
do not want to spend too much on celebrations. In such an environment it is also hard for
companies to find new investors (Kotler and Armstrong, 2010). Due to this Nestle is spotting
its opportunities in the emerging markets such as Malaysia where the living index and per
capita income has seen a rise.
Social: Society demands are changing at very fast speed. Chocolates have become one of the
crucial parts of the celebrations and hence companies are also making efforts to rebuild their
marketing campaign in such a manner that they look to be a best product for the celebration
or enjoying time. At the same time increasing job insecurity and reducing stability in the
market has forced the firms to make marketing plans that reaches to all the sections of the
society (Jobber and Ellis-Chadwick, 2012).
Technological: Most significant changes in the last two decades can be seen in the way both
employees and organisation is using technology for their purpose. Advancements in the
technology have helped the firms to make changes in their business model from production to
reaching out to customers. In marketing also companies are investing more on doing business
through digital mediums. People are also ordering confectionery items with the help of online
technologies which is a sign for the company that where they will have to look towards in the
future (Berthon, et al. 2012). This trend is not only followed in technological advanced
nations but also becoming common in the developing nations.
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Legal: The legalities regarding the food quality have become very strong. Even the slightest
of defects can put this company under pressure. This is evident from the case of Maggi
Noodles which was once one of the best-selling products of this company but due to the food
quality it has to face lots of legal issues. This can easily happen in the chocolate products also
if not proper watched (Czinkota and Ronkainen, 2013).
Environment: The change in the global climate has an impact on the production of food
items such as Cocoa. This is a challenge towards the sustainability goals of Nestle. Apart
from this, Nestle has to deal with huge amount of waste products and hence they need to
make a new waste management plan to tackle with this issue (Hawkes and Harris, 2011).
Competition: Competition in the industry has grown to alarming level and this has reduced
the sales and profit margin of the company in different parts of the world. Competitors such
as Cadbury, Hershey’s, Pepsico are giving tough fight to Nestle. With the product
differentiation and pricing strategy they are also able to change the trends in the market. Even
in the small nations like Malaysia, there is increase in the numbers of local and global
competitors (Gillespie and Riddle, 2015).
Marketing strategies
This company has made many kinds of marketing strategies so as to confront the challenges
facing their business and to be successful in the current situation. Some of the marketing
strategies used by Nestle are as follows:
STP strategy of Nestle
It is essential for an organisation like Nestle to identify most appropriate strategies for
segmenting and targeting their customers. It is crucial part of the marketing that they select
the most appropriate target segment for them so that maximum sales can be guaranteed
(Terpstra, Foley and Sarathy, 2012). Segmentation and Targeting is done on the basis of
different kinds of variables which are illustrated below in the table.
Types of Segmentation Segmentation Criteria McDonalds target segment
Geographic Region International/Domestic
Density Rural/Urban
Demographic Age 3-55
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Gender Male and female
Life-cycle Stage Child, bachelors, married
Income Middle and Low
Occupation Workers, students and
employees
Behavioural Benefits sought Time efficient and cost
efficient people
Degree of loyalty Switchers and Hard core
loyal
User Status Both regular and potential
chocolate eaters.
Personality Caring, Careless as well as
Easy going
Psychographic Lifestyle People from all sections of
the society which includes
Mainstreamer individuals
and Strugglers.
Social Class People from all social class
of the society.
Their positioning strategy is unique as they have not positioned their chocolates as something
that is very chocolaty or product that lures the taste buds of chocolate lovers. “Broad in
appeal, young in feel, big in stature” is their tagline which itself suggests that how they have
tried to attract their target segment. Their positioning strategy largely focuses on creating
value and belief. Their promotional taglines such as “Have a KitKat Break” suggest that
company wants to focus on making it a daily use product rather than making it an occasional
product (Chandon and Wansink, 2011).
Making products widely available: In their marketing strategy, company has focused
towards making it available at all the stores so that it can be easily available for its customers
(Saxena, 2011). For this company has concentrated on their efficient supply chain model
which helps them in reaching to each and every region.

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Promotions through multiple channels: This Company has focused towards promoting its
products through multiple channels. They are using both traditional and digital marketing
means to enlarge its visibility. In the recent years, they have largely concentrated on
promoting through online mediums. It is due to the fact that their major target segment is
highly available on these digital marketing mediums. Social media has become one of their
prime platforms where they are promoting their products (Peck, et al. 2013).
Promotional Campaigns: They launch many types of marketing campaigns in different
parts of the world which seeks to attract people especially their major target segment. In these
campaigns, they take the help of local artists so as to create a bigger campaign. They also
arrange competition at local levels and the winners of this campaign gets a cash prize (Day,
2011).
Price leadership: This Company believes on the competitive pricing based on which they
have set their products at lowest of cost. This helps them in attracting large numbers of
customers and also helps them in taking an edge over their rivals (Scrinis, 2015).
Lucrative packaging and variations: Kitkat is available in different types of design i.e. two
stick and four sticks package size. Kitkat is being available in numerous limited editions
which include Kitkat Green Tea Chocolate and Kitkat Chunky peanut butter (Street, 2015).
Localisation: This Company has almost every time focused on localisation strategies. For
instance their prices are set according to the local market. They generally hire local people
which help them in connecting with the customers. In their advertisements they widely use
local touch which helps them in connecting with the people in the market (Ghauri, Cateora
and Ghauri, 2010).
SWOT Analysis
Along with the external environment, it is also essential for the organisation to analyse the
internal environment. For analysing the strengths and weaknesses of the company, the use of
SWOT analysis can be effective.
Strengths
This company and its product KitKat have a huge brand name which helps them in
making their mark in the industry. At the same time, it helps company in marketing
their products easily.
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Nestle is the biggest food company in terms of revenue which shows the amount of
financial capability they have. This financial asset of Nestle helps them in making
new investments in different parts of the world.
Their research and development capability in the industry is large which helps them in
bringing innovations in their product. This helps them in gaining edge over the rivals
as they bring their products in different variations (Vander Schee, et al. 2011).
Nestle has a strong world-wide presence which gives them an immensely diversified
income sources. This is necessary in the type of economic environment present in the
different parts of the world. This can be understood by the fact that if the company
faces sales challenges in one part of the world, they can easily achieve higher sales in
the other corner.
This company has also made its reputation in terms of environmental sustainability
efforts they have made in different parts of the world. This is very much essential for
improving the CSR image of the firm in the minds of the stakeholders.
Huge amount of highly skilled labourers are attached with the company and this helps
them in increasing their productivity and improving the ways in which they operate
their business functions. This has helped them in implementing their strategies
appropriately which again helped them in achieving their desired objectives (Appiah-
Adu and Amoako, 2016).
Weaknesses
This company has been highly criticised for high usage of water. It has also faced
criticism on selling unhealthy food items as well as it is also facing criticism over the
issues such as anti-unionism, forced child labour and taking use of unethical practices
in their business.
Company has faced a blot on the image for selling contaminated food for which they
had makes certain product recalls.
Lesser product diversification in the chocolate industry as they are not producing any
chocolate product that is high in terms of chocolate content (Akhtar, 2016).
Opportunities
They can improve their image by clearly mentioning the harmful ingredients present
in their product.
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They also have huge opportunity in bringing transparency in the sourcing of
materials.
They have opportunities to expand in the rural areas of developing nations as well as
in the under-developed nations (Kaynak and Herbig, 2014).
Threats
The degrading environmental condition is affecting the quality of the cocoa which
will have long term effect on their confectionary items.
Tremendously high competition in the food and beverage industry has an impact on
the sales and revenue of the company and most importantly on the market share.
Increasing economic instability is threatening the sustainability of the company as
adding new investors is not easy for the company in such an environment (Andres
Coca-Stefaniak, Parker and Rees, 2010).
Competitor’s analysis
Nestle is facing competition from different competitors. Analyses about the marketing of
some of the major products by competitors are as follows:
Diary milk by Cadbury: In the chocolate industry, Cadbury is their biggest competitor and is
known for its high quality cocoa rich products. Diary milk is available in large varieties and
taste which has played a major role in increasing the sales. They have placed the prices
slightly on the higher side but still not in the category of luxurious products. They have
promoted diary milk as a chocolate that provides maximum value to the customers that are
demanding for high chocolate rich products. Their promotions also highlight that this product
can be utilised as a gift and this the major reason why they give extreme importance to
packaging and marketing. Festive marketing has been the trade mark of Dairy milk
(Thatcher, 2019).
Ferrero Rocher: This product is also one of the major competitors of Kitkat and they have
placed themselves in the category of luxury products. Company has been successful in terms
of placing them as the product that gives taste of chocolates that are highly cocoa rich. This
company uses its quality and brand name as a major marketing strategy for presenting itself
in the market.
Mars: This is one of those competitors that have the same types of confectionary items that
Nestle has. This company is known for its quality and is available at reasonable rates. Their

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bar chocolates have been successful over the years. They believe on the strategy of unique
products that gives them competitive advantage over the rivals.
Marketing plan
For the success of the marketing campaign, it is essential that firm looks for the best
marketing approach (Beran, et al. 2012). This can be done by making a marketing plan that is
feasible and suitable. There must be use of different variables so as to make the marketing
effective.
Marketing mix
Marketing mix is a tool that is used in the marketing by any firm so as to improve the
effectiveness of the campaign. This allows a firm to have a detailed approach that explains
about what is the product, what is its price, what is the promotional strategy used by the
company to market it and where it will be placed in the market. Marketing mix for Kitkat is
as follows:
Product: Kitkat is one of the best wafer based chocolate product that is marketed by Nestle.
Kitkat gives the best value to its users as it is moderately priced and gives customers
experience of chocolate that is available with crunch of wafer. This is best suitable product
for the customers who want chocolaty products at affordable prices. Traditional bar of Kitkat
is four fingers wide having dimension of 0.4 inches to 3.5 inches. This product is available in
different taste and sizes and also varies from country to country. Kitkat has seprated itself
from its major competitor’s product i.e. Dairy milk which is pure chocolate. In Japan they
have launched around 200 variants of Kitkat comprising of flavours such as green tea,
banana, ginger ale and soy sauce. They also offer Kitkat white and dark which provides them
with huge penetration capacity in different parts of the world. Traditional Kitkat comprises of
ingredients such as milk, cocoa mass, sugar, cocoa butter, lactose and whey powder etc. In
some part of the world like Melbourne, they have a customisation facility where they
customise their Kitkat as per their demand (Kabii, 2018).
Price: This product has been priced according to the existing competition in the industry and
the type of pricing model adopted by their competitors. Products such as Kikat is understood
to be an impulsive buy as chocolate in this product do not constitute large portion. Its pricing
is considered to be reasonable as it ensures that it gives its customer a total value of their
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price. This is the major reason why large numbers of customers are loyal to Kitkat especially
in terms of doing purchasing decisions. In spite of the increasing economic flexibility, this
company has been able to maintain the price of Kitkat over the years. This is one of the major
reasons for retaining customers (Izberk-Bilgin and Nakata, 2016).
Place: Nestle sells their products in worldwide location which illustrates its strength in
supply chain management. There has not been significant cases of misbalance in the demand
and supply of the products. They are selling their products through offline and online
mediums. They have collaboration with local vendors and distributors. This has helped them
in reaching to larger part of the market share. They are also taking use of the third party
vendors on the online mediums to sell its products.
Promotions: This Company has applied different kinds of promotional strategies to gain a
market share. They understand the importance of marketing in the growing competitive
market. In order to create a buzz in the market, company has launched many varieties of
Kitkat but they rolled out these versions so as to save the original version of the product.
Nestle has promoted Kitkat as more of a snacks product rather than portraying it as a
chocolate. This is also evident from its slogan “Have a break, have a Kitkat”. This also helps
them in making it a product that can be consumed at any point of time and not only when a
person has craving for chocolates. They have marketed Kitkat as best companion of tea or
little meal. Google made request for naming an Android version as Kitkat. They have also
promoted its products on different TV shows such as Big Brother and some movies also. Till
now the major channel for advertising Kitkat has been TV advertisements but now they have
started to shift their focus on online and social media marketing (Baines, et al. 2017).
Action plan
Activity Time Period
(in months)
Manager Growth Objective Concerned
Department
Situational
Analysis
3 Marketing Head Collecting authenticated
information about
different consumers as
well as the condition of
the market.
R&D and
marketing
department
Adopting new 1 IT Manager Utilising technology and IT department
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technologies that
can help in making
marketing
effective
creating objectives
Segmentation and
targeting of the
customers.
3 Marketing Head Deciding target groups
and people
Marketing
Analysing
resources
4 R & D Head Procuring Resources R & D
Initiating
disruption in
supply chain
2 Management
Head
Finding right technology
for the campaign
Management
Implementation of
marketing plan
especially using
digital
technologies by
running marketing
programs on the
digital mediums.
8 Marketing
manager
Taking help of digital
media such as social
media and other tools
Marketing
Allocation of
budget
1 Manager Defining of expenses for
each of the activity
Management
Communication
with potential
partners and
customers about
disruption
3 PR Manager Attracting customers Public
Relations

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Training of
employees
1 HR Manager Train the employees so
that they can deliver the
disruption to the
customers
Human
Resource
Management
Initiation of Sales
by creating
disruption in it.
12 Manager Implementation of sales Manage
This action plan will help the company in implementing the strategies made for doing
marketing. Slight changes will be done in the action plan during the implementation based on
the requirement and analysis.
Monitoring and feedbacks
It is crucial that company monitors each and every process of marketing. Monitoring can be
effectively done with the help of technological mediums. It is essential that firm has a
dedicated marketing team that monitors the way in which is done and gives feedbacks in case
of any identified issues. In this monitoring process there must be use of different types of
metrics based on which each and every aspect of the business can be analysed (Kazemi and
Esmaeili, 2010). There must be a long term plan for monitoring so as to ensure that issues in
marketing at any stage of the process can be documented. In the process it is essential that
early success is not predicted. Predicting success at the early stage is one of the major reasons
why company fails in the long term. Metrics such as Return on Investment, customer’s
feedbacks, conversion of potential customers into actual ones are helpful making changes in
the marketing plan which ensures its success.
Based on this analysis, company needs to collect feedbacks about the marketing from both
stakeholders as well as customers. Based on these feedbacks there must be self-evaluation so
as to why they are the desired results are not achieved. Changes are made in the plans and
strategies accordingly. The use of digital media platforms such as social media can be
effective in collection of feedbacks (Berlan, 2012).
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Budget for marketing
This company need to focus on the marketing through digital media channels rather than on
traditional marketing. According to this budget for the next two years on the advertisement of
Kitkat has been provided in the table.
Activities 1st year (In $) 2nd year (In $)
Direct marketing 15000 18000
Sales marketing 17000 19000
Traditional advertisement 33000 29000
Social media marketing 8000 8000
Digital marketing 13000 30000
Total 86000 104,000
Recommendations
There are large numbers of competitors available in the market. These competitors have the
capacity to change the trends in the market. In such an environment company must focus on
the innovation. Innovation in terms of type of products, design with which it is produced in
the market and strategies that is used by the company needs to be analysed so as to stay ahead
of the competitors. Since people prefer online mediums for making purchase hence Nestle
should also give importance towards how maximum sales can be achieved through online
mediums.
It is also recommended that company needs to make agreement with other companies in the
food and beverage industry so that they can sell their products combined. Like they have
made agreements with Coca Cola, company needs to have more such contracts in future also.
This will help them in making additional sales through different products. It is also
recommended that this company takes use of digital mediums so as to market in the wider
community. Company should also use data analytics and predictive analytics to measures
trends in the market in the current time and in the future (Squicciarini and Swinnen, 2016).
This will help the firm in not only ensuring sustainability but will also help them in making
changes in the marketing approach in the coming time.
It is also recommended that company focuses on increasing their reach in the rural market
especially in the under developed and developing nations. This is because it will add new
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income sources to the company. Company should also focus on packaging so as to make it a
product that can be sent as a gift. This is also because chocolates have become major
products that are exchanged by people on the festive occasion.
CONCLUSION
From the above based report it can be concluded that Nestle is one of the biggest food and
Beverage Company in the world. Kitkat its one of the famous product is facing challenges
from different competitor’s products. For this company needs to redesign their marketing
campaign accordingly so as to ensure their long terms growth in the market and achieve
higher sales. This company needs to focus on innovative digital mediums so as to do
marketing and take help of predictive analytics to understand the changing purchasing
behaviour in the future. During this period company needs to look at the strategies of
competitors such as Mars, Cadbury and Ferrero Rocher so as to make better strategies than
them.

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