Nestle's Market Segmentation Strategies

This assignment analyzes Nestle's effective implementation of market segmentation. It highlights how Nestle targets various demographics with its diverse product portfolio, ranging from chocolates and instant noodles to coffee and juices. The analysis emphasizes Nestle's focus on nutritional value, particularly appealing to parents seeking healthy food options for their children.

Activity 1
1. The marketing concept holds “that the key to achieving its organizational goals (goals of
the selling company) consists of the company being more effective than competitors in
creating, delivering, and communicating customer value to its selected target customers.
(Kotler 2000).” The example of a non-profit organization that I took is the ‘Make-a-
Wish’ foundation that grants the wishes of children with life-threatening diseases such as
cancer, leukemia etc. to come true. A lot of other non-profit organizations also ask for
donations for children with such diseases but the Make a Wish foundation has an edge
over the others.
2. Billabong is a website comprising of a lot of information about surfing, skating and
skiing. Videos, articles and images of people wearing billabong merchandise can be seen.
Even though the website is filled with content relating to the above, there is
comparatively lesser information provided about billabong products. Scarcity of product
information on any social platform these days can be a cause of annoyance in the target
customer. If a person has to search a lot for the information on a product that he wants
and your website is not providing the same, chances are the customer will not come back
again to the site any time soon. While the Billabong website does an amazing job at
providing tons and tons of information about surfing in the form of articles, videos, blog
posts and images, it lacks product description. However, the site can improve the same by
making slight changes to the site and targeting the right customers.
Activity 2
1. Nestle is a well known brand across the globe. They provide a wide range of good quality
products. The aim is psychographic, demographic as well as behavioral segment of the
market. Nestle promotes its products as “nutritious”, therefore, targeting people who are
health-conscious. Nestle has a whole range of baby products that are promoted as having
all the vitamins, minerals and nutrition a toddler needs, thus targeting mothers and future
moms. An example of targeting psychograph segment is how they promote coffee.
Coffee is usually regarded as a “rich people’s drink”. By providing a quality product at an
affordable price to their customers, they influence their lifestyle. Nestle also promotes
their brands worldwide, thus targeting geographic segmentation. “Geographic

segmentation is done using the spatial location to segment the market (Udas 2014)”. It is
a global brand, selling in a number of continents and countries. Nestle will definitely be
successful in its brand promotions and campaigns as they are targeting all the segments of
the market that a brand can. Having been in the market for so many years, Nestle has
built a name for itself and its customers know that they get quality products at affordable
prices.
Activity 3
1. As with any process of estimation, the process of determining the income distribution by
a company in New Zealand will require a lot of research and study of country wide
statistics, trends and influences. New Zealand’s economy has changed a lot over the years
and there has been a major increase in the gap in low income households and high
income households. The company can begin the process by segregating the income of
household into different categories. This will help in determining further the different
trends and influences. By segregation of such categories, one can further analyze the
increase, decrease or steadiness in the income on an individual as well as household level
within the categories. By further analyzing income after taxes levied and disposable
income of the households, one can understand the different patterns and trends arising.
This also helps in analyzing unemployment trends as well as current job opportunities.
There has been a significant shift in the female workforce participation as more and more
number of women has started earning. Categorization should be done in all possible
manners, based on age, gender, income etc. to truly understand the changes, trends and
influences in the income distribution.
Activity 4
1. “The Fast Moving Consumer Goods industry covers the household items that you buy
when shopping in the supermarket or a pharmacy. (What is FMCG 2015)”.
The first example of FMCG I have chosen is Coca-Cola. Coca-Cola has a segmented
approach when it comes to their marketing strategy. Their main target is the age-group of
10-35 years. They are very often seen promoting their brand in collaboration with well-

known celebrities. Coca cola also came up with their “diet coke” which targeted people
above the age of 40 and those who prefer less sugar or are diet conscious.
The second example of FMCG is Johnson & Johnson. This company also has a
segmented approach in its marketing as its products mainly deal in baby-care, oral-care
and women’s health and beauty among others. Gender and age groups are their main
targets. “Johnson & Johnson’s Baby Care franchise contributed ~15% of the company’s
total segment sales for 2016. (Benson 2017)”. Along with that, Johnson & Johnson is a
global brand and has grown worldwide in the past years. “Their products are sold in over
175 countries and accounted for worldwide sales of $65 billion in 2011. (What is FMCG
2015)”. The last example of FMCG is Nestle which also uses a segmented approach in
marketing itself. It targets a wide variety of customers with varied demographics,
belonging to different age groups and having different lifestyles.
Activity 5
1. There has been a major change in the global demographics the past few decades.
Demographic trends can be defined as the characteristic changes or newer trends
occurring in the human population. According to the recent changes in the global
demographics, there is a rise in the number of older people as compared to the youth. “By
around 2040, there will be more elder citizens than children (Now 2014)”. This figure
will double by the following decade. As the number of elder people increases, industries
manufacturing and retailing items that are required by elder people such as medicine and
healthcare industry will benefit. This will also indicate an increase in job opportunities
for the youth in the scientific research as well as the healthcare sector.
People have also moved from rural areas to urban areas and from developing countries to
developed countries, mostly because of availability of better opportunities. “As the Baby
Boom generation heads toward retirement, growth in the nation’s working-age population
will be driven by immigrant (Anthony Cilluffo 2017)”. Following this shift in the
demographics, a rise in the GDP of countries as a whole is expected to be seen. The
structure and growth affect the worldwide economy, changing patterns of demand and
supply in the marketing industries.

Expanding on Activity 1 & 2
Activity 1
As discussed above, the Make a Wish foundation is now a globally recognized non-profit
organization. By applying the marketing concept, the make a Wish foundation grew
immensely and came to be recognized internationally. In today’s world the customer has
immense number of choices. Therefore, it is imperative for any organization to bring
something different and unique to the table that the customers may not find elsewhere.
This is exactly how the Make a Wish foundation grew manifolds. “It needed to let
volunteers know that they are the heroes, so more would want to join (Steimer 2017)”.
Granting wishes to children with life threatening illnesses means arranging for
experiences involving meet-ups with celebrities and what better way to market a brand
than by collaborating with well-known people? “Big-name sponsors like Disney, Frito-
Lay, 3M and Amtrak soon started lining up to help with those efforts once word started
getting out that Make A Wish was conducting a national campaign (Todé 2007)”. People
donating money to this charity get an inner satisfaction that they contributed to a lifetime
experience of a child with a deadly disease. It is evident that the make a Wish foundation
applied the marketing concept to develop and promote their brand.
The second part of activity 1 talks about The Billabong Company which is an Australian
website that has a lot of content relating to skiing, skating and surfing. By visiting their
website, one can deduce that providing appropriate information to the target customer is
essential in building a brand/business. Thus, one must be aware and analyze the
information he/she is putting up on the internet about their brand and determine
beforehand if the content is going to be attracting the target customers or driving them
away.
Activity 2
In this activity, we discussed about market segmentation by Nestle. Brands use market
segmentation as a strategy to promote themselves. This helps them to understand
consumer behaviors and psychology, which they utilize to better understand their needs
and then provide a better product to the customer. Based on their site, the company has a

lot of new promotional campaigns going on. These target customer’s eating habits and
aim at providing better products to the consumers, enhancing their lifestyle. “On top of it,
Nestle regularly introduces trade discounts and various tactics to keep the channel
motivated (Bhasin 2017)”. The company has been in the business for so many years.
Over the years, Nestle has learned to segment the market and meet the demands of one
and all. Targeting people of all ages, Nestle has products ranging from chocolates, instant
noodles and packaged milk to coffee and juices. This is they indulge themselves in
demographic segmentation of the market. As mentioned earlier, because Nestle has a
range of products that are mainly consumed by children, such as chocolates, milk, baby
food etc., Nestle promotes itself as a brand that is conscious of the nutritional value of
consumer goods they produce. They want to be known as manufacturers of “nutritious”
food, target mothers and parents who want healthy food for their babies. Thus, we can
conclude that Nestle uses the market segmentation very well as it has expanded its
business globally and continues to flourish.
References-
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<http://marketrealist.com/2017/03/johnson-johnsons-consumer-segment/>.
Bhasin, H 2017, Marketing mix of Nestle – Nestle marketing mix, viewed 18 august 2017,
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