Case Study on Nestle (PDF)

Nestle S.A is one of the leading companies for food processing industry across the
world, where the headquarters is located at Vesey, Switzerland. It is supports by its strong
network in more than 86 countries such as Asia, America, and Africa. It is serving different
types of food products mainly focused on baby food, breakfast cereals, confectionary items,
ice cream, dairy products and pet foods. As it is a company in the sector of food and
nutrition, it remains sensitive to culinary and eating habits thus respond to specific nutritional
problems whilst also setting and matching new trans such as growing out-of-home
consumption and caring about the wellbeing of its consumer.
Marketing Environment
Marketing environment includes the actors and forces outside marketing that affect
marketing management’s ability to build and maintain successful relationship with target
customers. It includes the internal factors and external factors that surround the business and
influence the marketing operations. Some of the factor are controllable while some are
uncontrollable thus required the business operations to change accordingly. Nestle must be
well aware of its marketing environment in which it is operating to overcame the negative
impact from the company’s activities.
Micro environment
Micro environment consists of factors close to the company that affect its ability to
serve its customer.
a) Suppliers
Suppliers provide the company with raw material resources, unfinished goods
and labours to produce goods and services. The effectiveness of the suppliers
will determine the company efficiency to produce goods and services as well
as the quality of the finished product. Other than that, it is a challenge for the
company to maintain its standard all over the world and provide the
consistency to its customers in the taste and quality of the product. The
supplier for nestle can be divided into two which is labour suppliers and
material suppliers. Labour suppliers deals with the quantity of labour that is
required to prevent the loss of labour force and avoid from the shortage of
labour. Meanwhile, the material supplies handle all the materials needed in
order to manufacture the finished product for sale. The materials such as
meats, grains, fish and cereals plays a major role in the succeed of the products
in market.
b) Marketing intermediaries
The market intermediaries of the company help to advertise, sell and distribute
the product to the end customer. The physical distribution network of the
company decides the medium by which the finished product is delivered to the
final buyer on time and with safety. They also ensure the proper storage to
prevents any damage on the product. The marketing service department help
in promotion of the product and act as a communicator between company and
customer. The action of communicator helps in the development of product as
they have the feedback from the customers through surveys. In addition, other
intermediaries such as banks helps to provide funds and play an important role
in continuing the company.

c) Customer
Customer are considered the most important factor in the business because of
the impact they have on business. Their importance has grown higher in the
21st century especially for a big company like nestle. Nestle need to
understand the customer wants and needs to create promotional strategies and
campaigns. Sometimes, it also helps at generating new product as they
understand the customer’s preferences better. Nestle have made new product
like Maggi ‘Pedas Giler’ due to the fact that Malaysian people like to
challenge themselves eat spicy foods.
d) Publics
Any group that has an actual or potential interest in or impact on an
organization’s ability to achieve its objectives. For example, financial publics,
media publics, government publics and local publics. Every brand needs a
strong brand image hence the investment in social and environmental concerns
to create a responsible social image. As an example, the media publics is the
professionals with the ability to publish news, features and editorial opinions
on Nestle which on can influence the people to believe the news whether it is a
good or bad news. From this, Nestle may face some dangers if the bad news
spread around and will lose some loyal customer.
e) Competitors
Nestle must gain strategic advantage by positioning their offerings strongly
against their competitor like Dutch lady, Yeo Heap Sang Limited and Mail
Dairy Industry Co.,Ltd. The food and beverage industry is vast creating more
opportunities for market players. With the increasing competitors, nestle need
to be alert and take any opportunities to expand their business and layout new
products to attract customer and shareholders.
Macro environment
Macro environment consists of the larger societal forces that affect
microenvironment.
a) Political and Social factors
With operations spread out across the globe, Nestle is liable to political
influences unique to various jurisdictions including applicable law and
regulations governing business operations, stringent international health and
safety requirements in the food and nutrition sectors. For example, ISO 9002
and HACCP (hazard analysis critical control point). These regulations are to
protect the consumers from poor quality, potentially health averse products.
The company has faced challenges related to the contamination and poor
quality which have led to product recall and market concern thus hurt the
company’s images and impact the sales.
b) Economic factors
The global business environment has recently been significantly hindered by
economic setbacks due to downturn and global recession. These have affected
demand for products through its effect on the consumer. However, recovery
has been swift and the demand became higher as the globalization and