Analysis of Marketing Environment for Nestle in Australia

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This report discusses Nestle's FROST drink launch in Australia and its marketing mix strategy including product, price, place, and promotion. It also covers customer and competitor analysis, SWOT analysis, and positioning strategy.

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Running head: Marketing Mix
Marketing Mix

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Executive Summary
Nestle is one of the biggest food and beverage business globally with more than 2000
brands in 191 countries. It is seen that nestle established in 1908. There are many controversies
and achievements but the company does not stop from penetrating in the Australian market. In
this report, further discussion will be made on Analysis of marketing environment for nestle in
Australia. In the Australian market, the company will launch new fruit boost drink FROST.
FROST is the fruit drink that will help to open many new ways for the company so that
large audience can be gathered. It will also assist on the emerging health market that helps to
enhance the market share in this industry.
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Introduction and Background
Nestle is a Swiss Transnational company with its headquarters in Vevey, Vaud,
Switzerland. The company deals in foods and drinks sector and is largest in the world. The
company employs more than 33,000 employees (Nestle, 2013).
Nestle established in 1905 when Anglo Swiss milk company was merged. Nestle sells
the products like Baby food, medical food, and infant products. The main development model of
the company is to attain large market share so that risks that are involved could be minimized.
The company works to enhance its product line so that development of new products can
enhance the demand of the customers. There are many competitors like Coles and Woolworths
(Moura, Branco & Camoesas, 2015).
FROSY is a fruit drink that nestle will launch in the Australian market by analyzing
proper marketing strategies like Marketing Mix so that growth can be achieved in an effective
manner.
Marketing Mix
Marketing Mix is related to a set of actions that the organization takes into consideration
to encourage its brand or the product in the overall market. There are 4 P's that will be discussed
in marketing mix like price, product, place, and promotion.
Product
FROST is a fruit-based drink that has four natural tastes like Kiwi, strawberry,
blackberry, and pomegranate. The product with all the four flavors will be launched in the
standard size of 250 ml. The fruit drink will be made from fresh fruits and no preservative will
be there. The packaging of the product is blue in color that will help the customers to identify the
product easily.
Price / pricing
It is related to the value when the product will be launched in the Australian market.
There are two pricing method that can be considered like Cost based pricing and market
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comparison pricing method. Cost based pricing is the pricing strategy that will be used for
introducing the energy drink in the market (Porter, Hills, Pfitzer, Patscheke, & Hawkins, 2011).
The price will be calculated by adding the overall cost of the product. By evaluating the current
prices given by the other competitors we will try to keep the prices low at the initial stage so that
more customers can be attracted (Crane, Palazzo, Spence & Matten, 2014).
Place/ distribution
The customers will be targeted in the large urban areas. It is seen that the company has a
good distribution channel that will help the customers to purchase the product easily. We will
ensure that the product should not only be available in hypermarkets like Aldi but also in
supermarkets like Seven-eleven. The target will be on local outlets and cafes as there are many
people who spend more time there. We will also ensure that the energy drink should be available
in the sports events so that the customer engagement can be enhanced (Hunt, 2014).
Promotion / promotion strategy
The target audience of the product should range from 15-54 so that promotion can be
done effectively.
In order to attract young people (15-30), we will be ensuring that there should be a proper
distribution of products in sports events or the products should be distributed as a free sample in
the events (Payaud, 2014).
Customer Analysis
Target Market
The energy drink will give emphasis to youth and adults, both male and female customers
as they have large customers of energy drinks worldwide and also in Australia. It is analyzed that
the population of Australia is more than 23, 0000 with exactly 89 percent of the people living in
urban areas making it easy for the businesses to provide products to an audience. The youth and
working-age population (15 – 64) is about 66 percent and the focus will be on the people who are
( 50 – 54). They should drink this drink in the gym and also it should be distributed in sports
events so that people feel energized (Peck, Christopher, Clark & Payne, 2013).

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Competitors Analysis
It is seen that the product will be an energy drink that will target the youth and working
class. There are many competitors in the market but the company offers energy drink to the
customers that are different from other competitors like juice world, Parker organic juice and
nippy. The company will be offering energy that will target many sports and day to day
activities. The products that will launch have four flavors grapefruit, kiwi, and blackberry. It
will offer an opportunity to attract customers so that they can look healthier and energized. This
product is different from other competitors as it has low amount of B vitamins, taurine and sugar.
The energy drink is also sugar free that will help the diabetic patients.
Marketing Environment Analysis
Internal Analysis
The internal microenvironment displays internal strength, weakness, opportunities, and
threat to the company. SWOT analysis gives emphasis on various points.
STRENGTH WEAKNESS
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a.) Top leading organization
b.) Various range of products
c.) R&D
d.) Corporate social responsibility
e.) Well established brands
a.) Quality
b.) Publicity but in negative sense
c.) High advertising cost
OPPORUNITIES THREATS
a.) Increase in demand of healthy food
b.) New channels
c.) Spending power is high
d.) New joint ventures
e.) Giving emphasis more on research and
development
a.) Home grown brands
b.) Food contamination
c.) Cost wars
d.) Enhancement in price of raw material
STRENGTH
Top leading brand in food and beverage organization: To be a leader of the company has a
good hold on the wide variety of food and beverages that is harder for other competitors to
compete. It is seen that if FROST is launched in the market then overall growth can be easily
achieved as the company name is good in the market (Saluja & Mahajan, 2017).
a.) Diverse Range of the Products: Having a wide range and a global reach the company can
easily cater to the need of the buyer by taking into consideration different regions. This
will assist in increasing the overall image of the company and also grow the customer
base. As FROST will be launched in the market the variety of the product will be
increased (Dunning, 2014).
b.) Research and development: With proper incomes and reach the company has an
emphasis on studying and emerging new products as per the need. By analyzing the
necessity of the customers FROST will be the product that will be introduced in the
market (Qiao, Zhang, Wei & Chen, 2017).
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c.) Corporate social responsibility: Not only the company focuses on its products and profits
but the focus is also on the society to be better. They also focus on the ways to improve
that how the products are made in less time (Prince, 2015).
d.) Well established brands: The Company is known as a popular and renowned brand that
will ensure that the organization can compete with the competitors (Krafft, Goetz,
Mantrala, Sotgiu & Tillmanns, 2015).
Weakness
a.) Quality: Time and time again the company is not able to offer a constant good quality of
its products in and out of Australia. There are many recalls made in the product line of
the company (Patrizia & Gianluca, 2013).
b.) Publicity but in a negative sense: It is seen that due to the baby milk scandal the
company has a past negativity and it has given a negative image on the relations with a
large customer base (Lütkenhaus & de Freitas, 2016).
c.) High advertisement cost: Nestle give emphasis on advertising cost so that public
awareness can be created about the product and services. This does not assist at the time
of advertising and also it does not consider high costs of the organization (Lusch &
Vargo, 2014).
Opportunities
a.) Demand for healthy foods: The Company is already working in the health food sector
and can enhance the changing habits of the individual and also it ensures that healthy
food should be consumed by the customers.
b.) New channels: The Company has many new channels so the customers can reach easily
to a large audience.
c.) Increase in spending power: It is seen that due to growing purchasing power the
company has an opportunity to attract a large number of customers.
d.) Research and development: The Company spends a large amount of research and
development so that competitive advantage can be gained and also the enhancement can
take place in investments. It is important for every company to consider research and

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development so that the activities can be conducted smoothly. It is seen that if proper
strategies are not considered then it can be easy to achieve success in the market.
Threats
It is seen that there are many chains are Coles and Aldi that create a challenge for the
company to survive in the market. It is seen that the company is a known company then also
there are many issues related to food contamination. This gives negative impact on the customers
and also affects the brand image of the company. The costs of raw materials that are used
produce the products that are rising so the companies offer large amount to source the products
to its customers.
External Analysis
There are four parts of the analysis:
a.) Political environment: There are many factors that should be considered like employment
laws and government regulations for foreign companies. In the recent scenario, there are
many changes that are regulated the standards of the food.
b.) Economic environment: With the enhancement of the buying power of the customers it is
seen that the businesses can sell the products. But the customers are becoming cost aware
and there are many changes that are related to the consumer budgets. By considering all
the things the company spends an amount on innovating and redesigning new products
for the Australian market.
c.) Social environment: It is seen that the consumers are more aware of the healthy food and
the demand for the food products enhances. This offers the company a new opportunity
to diversify its lineup. Also, there is a change in the lifestyle of the people and also in
culture.
d.) Technological environment: There are many challenges that are posed by the competitors
to reach to the large mass of audience. The challenges are also related to the quality
control so that the company can easily handle the situation.
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Positioning strategy
Positioning strategy is related to a place that brand occupies in the mind of the customers
and it also distinguishes the products from the competitors. Positioning is considered as a
regular activity that helps to enhance the market share effectively. FROST is the product that will
be launched in the Australian market. Positioning helps the company to focus on a particular
aspect of the company. To position FROST it is seen that the Australian market will be taken
into consideration so that the demand for the product increases. It is seen that if positioning is
done properly then it can help to enhance the demand for the product (Zeng, 2017).
Conclusion
Nestle is a leader in the market and there is high acquisition and merger so it is not
difficult for the company to capture large market share. More emphasis is given on the quality so
that the company can easily connect socially in the market. It is seen it is important to consider
the changing trends of the consumers so that healthier option can be attained. The diversification
in the energy drinks as seen in the report will help to attract a large mass of customers so that
proper options can be considered. If the company consider natural and healthier energy drinks
then it can be easy for the company to gain a competitive advantage in a proper manner. So, the
company has made correct decisions so that large market share can be achieved effectively.
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References
Crane, A., Palazzo, G., Spence, L. J., & Matten, D. (2014). Contesting the value of “creating
shared value”. California management review, 56(2), 130-153.
Dunning, J. H. (2014). The Globalization of Business (Routledge Revivals): The Challenge of the
1990s. Routledge.
Hunt, S. D. (2014). Marketing theory: foundations, controversy, strategy, and resource-
advantage theory. Routledge.
Krafft, M., Goetz, O., Mantrala, M., Sotgiu, F., & Tillmanns, S. (2015). The evolution of
marketing channel research domains and methodologies: an integrative review and future
directions. Journal of Retailing, 91(4), 569-585.
Lusch, R. F., & Vargo, S. L. (2014). The service-dominant logic of marketing: Dialog, debate,
and directions. Routledge.
Lütkenhaus, D., & de Freitas, M. N. (2016). Strategic management applied to the Six-Sigma
suitability appraisal for R&D in FMCG companies. Revista iPecege, 2(1), 80-99.

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Moura, A., Branco, M., & Camoesas, M. (2015, June). NESTLÉ, A global firm and its customer
relationships. In IMC 2015 International Management Conference 26th June 2015 (p. 96).
Nestle, M. (2013). Food politics: How the food industry influences nutrition and health (Vol. 3).
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Patrizia, G., & Gianluca, C. (2013). Stakeholder engagement between managerial action and
communication. Annals of the University of Oradea, Economic Science Series, 22(2), 97-
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Payaud, M. A. (2014). Marketing strategies at the bottom of the pyramid: Examples from Nestle,
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Porter, M. E., Hills, G., Pfitzer, M., Patscheke, S., & Hawkins, E. (2011). Measuring shared
value: How to unlock value by linking social and business results.
Prince, N. R. (2015). The influence of competition and business strategy on organizations' use of
high-performance work systems. University of Illinois at Urbana-Champaign.
Qiao, D., Zhang, J., Wei, Q., & Chen, G. (2017). Finding competitive keywords from query logs
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Limited. Choice, 6(1).
Zeng, X. (2017, May). Research on the development strategy of product under the strategy of
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