Nestle Malaysia Marketing Plan: A Case Study

This report analyzes Nestle Malaysia's marketing plan, strategies, and analysis of its new product Nescafe Menu. It includes PESTEL analysis, marketing mix, market segmentation, and recommendations for the company.

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Marketing essentials: A case of Nestle Malaysia
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Executive Summary
The report has examined Nestlé’s marketing plan, the company’s activities in sustaining
its leading position in the current market and product marketing including its new product
Nescafe Menu. The report has also comprehensively analyzed the current marketing situation
including PESTEL analysis, marketing environment, marketing plan and the marketing strategies
applicable to the company in dominating the current market. Marketing mix and 4ps elements
including people, place, product, price, promotion, physical and processes are also examined.
Different strategies like collaboration with other companies, forming of SBUs and armies has
enabled the company survive competitive environment. The market segmentation of the
company is divided into t geographical area, demographic area, psychographic area and
behavioral area. The paper concluded and recommended that Nescafe need to differentiate its
products and expand to other countries with potential buyers but limited opportunities to access
the products.

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Table of Contents
Executive Summary.......................................................................................................................2
Introduction....................................................................................................................................5
Background of the Company........................................................................................................5
Briefing Document.........................................................................................................................6
PESTLE Analysis........................................................................................................................6
Political Factors........................................................................................................................6
Economic Factors.....................................................................................................................7
Social Factors...........................................................................................................................7
Technological Factors..............................................................................................................7
Legal Factors............................................................................................................................8
Environmental Factors.............................................................................................................8
Marketing Mix.............................................................................................................................8
B2B Markets................................................................................................................................9
Marketing Plan of Nestle.............................................................................................................10
Purpose and Mission................................................................................................................10
Situation analysis......................................................................................................................10
Marketing Mix 7 P’s..................................................................................................................11
People.....................................................................................................................................11
Product....................................................................................................................................11

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Price........................................................................................................................................11
Promotion...................................................................................................................................12
Place...........................................................................................................................................12
Process....................................................................................................................................12
Physical Evidence...................................................................................................................13
Market Segmentation and Target Markets.................................................................................13
Marketing Strategies..................................................................................................................14
International Strategies adopted by Nestle.................................................................................14
Significance of Interrelationships between Marketing and Other Functional Units of an
Organization.................................................................................................................................15
Nestlé’s Strategy for Business Development.............................................................................15
Conclusion and Recommendations............................................................................................16
References.....................................................................................................................................17

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Introduction
The report is about Nestlé’s marketing plan, the company’s activities in sustaining its
leading position in the current market and product marketing including its new product Nescafe
Menu. In addition, the report analyzes in detail the current marketing situation including
PESTEL analysis, marketing environment, marketing plan and the marketing strategies
applicable to the company in dominating the current market. The strategies of marketing will
further involve discussions on the product, pricing, promotion and distribution strategies.
However, the report will mainly focus on Nestle Malaysia, its newly launched products and its
brand Nescafe. Additionally, the researcher will provide solutions and recommendations in
overcoming the problems and solving the current scenario. Nestle Malaysia continues to play the
role as the Halal food manufacturer leader and the first multinational which voluntarily requested
for Halal Certification of all the company’s food products after its introduction in 1996. In 1989,
Nestle was public-listed on Bursa Malaysia (Köse, 2007 p.78). Currently, Nestle has employed
five thousand people, owned seven factories and six sales offices in Malaysia including one
international distribution center. The head office for Nestle Malaysia is based in Petaling Jaya,
Selangor.
Background of the Company
Nestle is a multinational company which leads in food business globally. Founded by
Henri Nestle who was a Swiss chemist, the company has the largest nutrition research capability
which has its base in Switzerland and is the largest manufacturer of food in the world. Further
research by Payaud (2014 p.57) shows that Nestle boasts of having its presence in over one
hundred countries with an employment of 276,000 worldwide and four hundred and fifty-six

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people and four hundred and fifty-six factories in eighty-four countries. The organization
currently owns 8,500 brands and produces over 10000 products which are different. Annually,
the company sells over thirty-two billion products. Moreover, Nestle has twenty-four centers for
research and development globally and makes an investment of RM5 billion each year on
research and development (Wymer, 2011 p.20). Nestle Malaysia which is the biggest global
Halal producer, engages in the marketing of Halal products. In addition, the organization has
differentiated its marketing whereby the firm has targeted several market segments and has
designed offers which are separate for each. Nestle Malaysia has utilized segmented marketing
(differentiated marketing) strategy by having several product categories intended at targeting
different customers.
Briefing Document
PESTLE Analysis
Political Factors
According to Varma and Ravi (2017 p.16) dynamic government regulations surrounding
the marketing options and standards of food affect the company. Nestle collaborated with various
relevant Non-Governmental Organizations (NGO’s) in support of the efforts of the government
of combating diseases which are non-communicable, during the Nutrition Month Malaysia
campaign in promoting healthy nutrition in the community. In addition, in support of the efforts
of the government in encouraging active lifestyles and healthier diets in order to assist in
mitigating challenges associated with cardiovascular diseases, diabetes and obesity, the
organization has made significant changes in improving the profile of its products to complement

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the efforts of the government in creating a healthier population. In addition, changing global
regulations result in challenges in adapting to different political forces.
Economic Factors
Domestic sales which are flat have reflected a change in the behavior of consumers in
regards to spending where they spend less and save more and has resulted to a slowdown in the
local economy which has affected the organization’s domestic business which has generally
remained flat for the reviewed period.
Social Factors
The company is founded on social responsibility and sound human principles and values.
In consideration, the population of Malaysia majorly consists of Muslims the trust and
confidence of consumers on peace of mind and quality affect their purchasing behavior for the
products of the company. Nestlé’s interest in Halal was due to the social responsibility and
respect for the Muslim consumers and employees whereby the company has currently begun to
appreciate the long-term investment it has been making in the marketing and manufacture of
Halal products. To ensure social responsibility to the Malaysian community, Nescafe is produced
locally to suit the preferences and tastes of local consumers although it is a global brand (Varma
& Ravi, 2017 p.17).
Technological Factors
All Nestle products undergo an extensive process of technological research and
development before its launch so as to ensure that the trust and loyalty of consumers have been
maintained. The customers of the company enjoy and benefit from the products of world-class
manufacturing facilities, international safety and quality standards, the best private research and

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development capability in food and nutrition and products catered to local preferences through
the use of high-level technology. In addition, the company is also committed to renovating and
innovating products with a basis of scientific and technological trials and evidence.
Legal Factors
Nestle has been affected by the changing nature of regulations. Therefore, the
organization has been forced to adhere to global changes and regulations across various
international markets. As a legal requirement, the organization is also required to pay taxes in all
the countries which it operates in addition to other different legal obligations.
Environmental Factors
The business environment for the company has greatly been influenced by the increased
attention which has been directed towards corporate social responsibility. Furthermore,
consumers’ and employees’ concerns including the strategies for recycling, manufacture and
packaging products have critically influenced the organization’s operations.
Marketing Mix
Nescafe uses the advertising of its product to promote the distribution, benefits, uses,
features and the image of its products. The organization presents its advertising strategies
through the internet, outdoor display, newspapers, magazines, radio and television. Therefore,
consumers can have a look at the physical features and evidence of the product. In the 7 P's of
Nestlé’s marketing mix, process refers to the company’s public relations (Berthon et al., 2012
p.265). The public relation in the marketing 7 P's of the organization’s marketing mix is used to
promote the organization, the people, ideas and image and also create various specific images

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including concern for social issues, value, innovativeness and quality. Nestle uses different
methods of marketing its products including event sponsorship, press releases and press
conferences which are organized to announce the launch of its new products, for example, the
Nescafe Menu. The firm’s sales force is referred to by personal selling for the purpose of
building customer relationships and making sales. The salespeople who are included in the
company’s marketing mix carry out the role of communicating with customers with an intention
of informing them about available products and coercing them to buy the products. The
organization uses its employees in the six sales offices to sell its products (Park, Ungson &
Cosgrove, 2015 p.82).
B2B Markets
According to Woodside (2010 p.1), business to business (B2B) is the best practice and
technique used by a company in the production of products and services and later on sell them to
other companies or businesses. B2B of Nestle Company focuses on both individual and
organization buyers. The company uses business-to-business marketing to meet the demands of
other businesses and companies despite some consumers driving the products offered by the
company. Nescafe being a large direct sale of Nestle and other products it sells the products in
bulk to other business like supermarkets and wholesalers. Furthermore, the relationship that
exists between Nestle Company and other trading companies has been linked with other
companies’ growth and expansion.

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B2C Markets
Business to Consumer (B2C) is the best practice and techniques used in the promotion of
organizational services and products among customers. Nestle company have been practicing
BC2 marketing techniques during promotions of its products. The products are promoted through
road shows, websites, blogs and social media so they can create awareness provide to the public
about the existing product or new products in the market.
Marketing Plan of Nestle
Nestles marketing plan is aimed at examining one of the company’s product line
extension focusing on both the external and internal environment. The plan also includes
marketing mix, marketing strategies, marketing mix 4 P’s and competitive strategies adopted by
the organization.
Purpose and Mission
The key purpose of the business plan is analyzing several elements of Nestlé’s product
line extension. The brands chosen are Nescafe Menu and Bear Brand Choco with the mission of
the plan being to find out how the products have met the company’s expectations before the
product is launched in the market.
Situation analysis
In order to bring the products in the market, Nestle Company has applied lots of
creativity and innovation on the existing production pattern. The company has further kept
preferences and taste of its target group including moms and kids. Moms want healthy kids while

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kids prefer tasty foods. Therefore, the products are mixtures of both healthy and tasty and it
creates value to the target group.
Marketing Mix 7 P’s
The 7 P’s marketing mix includes product, people, price, promotion, place product and
physical elements. The 7ps are essential for nestle company as they help in reviewing and
defining the company’s key issues affecting markets of its products.
People
Nestle Company has high reliance on all internal and external stakeholders. Having the
best staff who have provided customer satisfaction and repetitive purchases is a key essential to
why the company is offering high quality products and services.
Product
In order to sustain the competitive market, Nestle Company has launched a product called
Bear Brand Coco. The product is a healthy drink ideal for children and mothers. Despite its
irresistible taste of chocolate, the product has milk goodness. Furthermore, Bear Brand Choco
milk powered is fortified with resistance-building Vitamin C and Zinc that are good from
maintaining body fitness and strengthening immunity. In addition, these nutrients have beneficial
elements that assist in fighting fatigue and sickness. The product is also delicious, affordable and
nutritious to the customers.
Price
According to Molinari, Abratt and Dion (2008 p.363) customers will always relate the
prices to quality of the product. The relation is always founded when the products are ego

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intensive or technology-based. Nestle company has emphasized on quality of product and it has
offered reasonable and affordable prices making sure people from all income classes like middle-
income, high income and low income consume the product.
Promotion
Nestle company has the main focus on advertisement which is an effective considerate
medium of promoting its products. The media has a wide coverage and reaches many customers
within short time frames. Nestle company has recently adopted numerous promotions modes like
magazines which are believed to assist in creating public awareness. During promotions period,
the company uses both push and pull strategies. According to Wang and Tzeng (2012 p.5600),
push strategy is as a way of using all available distribution channels in order to push the products
on offer into the marketplace while pull strategies are the way an organization facilitates its
direct interface with clients.
Place
Nestle company has a high customer segmentation and its targets are to all customers
from urban and rural areas. Irrespective of place, Nestle products are readily available in all the
supermarkets and other outlets. The availability ‘of the products in diverse markets has enhanced
customer satisfaction and repetitive purchases.
Process
Nestlé’s product delivery is usually done with the presence of customers. Furthermore,
the consumers are subjected to pay for the services delivered to them.

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Physical Evidence
Nestlé’s offers some products and services that are in bulky and intangible. For all
purchases, the company offers some printed materials like receipts, warranties and brochures
containing information about the products
Market Segmentation and Target Markets
Marketing segmentation divides user markets on a basis of customer characteristics. The
segmentation for Nestle Company is divided into the geographical area, demographic area,
psychographic area and behavioral area. In terms of Geographic, Nestle Company has segmented
its market for diverse products depending on geographic weather like warm, hot and cold. For
example, in hot weathers products like Nescafe ice have generated huge sales. The Nescafe ice is
consumed with ice during the warm seasons as consumer’s tries to mix the product with chilled
or cold water to bring body freshness.
In terms of demographic age, Nestle Company segments its main products on
generations. For example, some products like Nido, Koko Krunch, Lectogen and cerelac are
segmented for children of different ages and for newborn babies (Tazrian, 2017 p.1). Nido
product has been nutritious for children of 2 years and above as it contains Vitamin D and 25
minerals that assist in child’s growth (Bijaoui, 2017 p.29). Cerelac is ideal for new aged baby as
it contains rise mixture and milk for babies of one year or less (Mohammed, 2014 p.1). Lacton
one is segmented for children below six months and lactogen 3 for babies below one year.
Furthermore, Nestle has segmented its market in terms of incomes and occupations. For
example, Nestle company has introduced Nescafe classic which is an appropriate product for
people who are busy in their jobs and requires freshness as it is a trend of grown-ups to need

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caffeine. Therefore Nescafe classic is effectively designed for them. In terms of psychographic,
Nestle has satisfied lifestyles and personality of its consumers. For example, Nestle has provided
Nescafe 3 in 1 to satisfy needs for people with a high engagement in activities and limited time.
Marketing Strategies
International Strategies adopted by Nestle
Nestle company has adopted several strategies for dealing with both internal and external
environments. The company has acquired domestic companies so that it can form an autonomous
team of managers who are more knowledgeable about local markets cultures than Europeans and
Americans. Furthermore, the company has also adopted a wide-area strategy in Asia continent
for producing diverse products in each country and later on supplying the regions with assigned
products from one nation. For example, the company produces soybean flour in Singapore,
cereal in the Philippines, soymilk in Indonesia, candy in Malaysia, coffee creamers in Thailand,
all for regional distribution. Nestle company has also adopted another strategy of collaborating
with other large companies with high market shares and brand loyalty. The strategy has recently
been successful for the company. For example, Nestle Company collaborated with Coca-Cola in
the early 1990s in ready-to-drink coffees and teas so that it can expertise in prepared beverages
and gain huge benefits from coca cola worldwide bottling system. The company also recruits
staff locally who are well equipped with knowledge, skills and understanding of business
procedures and local culture. The strategy has been an effective way of responding significantly
to conditions imposed on local demand hence increasing profit margins and organizational
market share.

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Significance of Interrelationships between Marketing and Other Functional Units of an
Organization
Marketing does not generally deal with selling alone but rather deals with other
specialized activities of the entire business. Consequently, marketing is basically the entirety of
the business when viewed from the final results point of view which is also the point of view of
the customer. In addition, marketing responsibility and concern should permeate all the areas of
the organization. The department involved with marketing needs to work closely with operations
management/production function in ensuring that there is adequate development and research for
the satisfaction of future and current customers’ needs. The marketing department also works
with the finance department in ensuring that adequate budget has been set aside for distribution,
promotion and research. Furthermore, the marketing department works with the human resource
management department to make sure that appropriate staffing and skills levels have been put in
place to create a competent and ambitious sales team, meet product target and develop and
research new ideas of products.
Nestlé’s Strategy for Business Development
The main strategy used by Nestle company for business development involves entering
the emerging markets in an early stage in order to establish brand trust and a good network
before the competitors bomb into the market with product differentiations. Furthermore, the
company buys a local brand name that is popular with the people and customers are accustomed
to it. This strategy assists in overcoming cultural barriers as in some regions customer’s
resentments foreign brands. In addition, Nestles’ strategy establishes an environment which is
biased and then expands into more niches and therefore market experiences rise in demands.

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Other strategies that have been adopted by the company include expatriate army and forming
SBU’s. In terms of expatriate army strategy, Nestle Company has established a group consisting
of many managers who have many years of experience in conducting management activities in
foreign activities. The managers are highly trained and educated in order to be able to sustain in
worldwide field of operations. Forming of SBU’s has also formulated effective strategic
decisions globally as each of the SBU’s has a focus on a specific segment including infant foods,
coffee, cereals and chocolates.
Conclusion and Recommendations
Nestle company has an opportunity of generating high profits from its distinctive
competencies like quality, customer responsiveness, innovations and brand loyalty. Nestlé’s use
of the best marketing strategies has created a lot of advantages that have led to the satisfaction of
customers in Malaysia by integrating various performance objectives including fair price,
flexibility, dependability, speed and quality. The pestle analysis has shown that the company has
maintained its marketing strategies in the country which has led to brand loyalty showcased by
customer’s repeat purchases. Essentially, Nestle has made its brand available in various outlets
that have resulted in customer satisfaction through a good packaging style, affordable price of its
products and attractive brand image. The Nestle Company should consider examining both
internal and external environment before launching its product to the market.

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