Nestlé Marketing Strategy Analysis

This assignment requires an in-depth analysis of Nestlé's marketing strategies, particularly focusing on their Slim Milk product. Students need to examine the company's segmentation, targeting, and positioning (STP) decisions, and how these contribute to their overall marketing success. The analysis should draw upon provided resources including articles, case studies, and Nestle's official website.

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Marketing & society

Marketing & society
Executive summary
The paper talks about the target market of Nestle Company. The Company achieved good
position in the market. Company believes in providing quality services to its customers. The
report talks about the marketing segmentation of Nestle, and their targeting and positioning. The
way through which company is identifying and fulfilling the needs of the customers is diverse
than its competitors. This will enhance the customer satisfaction and will result good position in
the market. Customer satisfaction will lead to the Brand Loyalty. In the segmentation it is clearly
shown that company is trying to expand the business globally. According to the areas, company
target the audience after understanding their requirements. The efficiency and effectiveness will
enhance the quality of the services. The quality will lead to the demand and result in the good
positioning in the market.
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Contents
Executive summary.........................................................................................................................1
Introduction......................................................................................................................................3
Market segmentation.......................................................................................................................4
Geographic segmentation............................................................................................................4
Demographic segmentation.........................................................................................................5
Psychographic segmentation.......................................................................................................6
Behavioural segmentation...........................................................................................................6
Advantages and disadvantages of different segmentation...........................................................6
Target market...................................................................................................................................8
Primary and secondary target market..........................................................................................9
Positioning.....................................................................................................................................10
Recommendation for positioning strategy.................................................................................12
Conclusion.....................................................................................................................................13
References......................................................................................................................................14
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Introduction
Nestle is one of the leading FMCG company, founded in Switzerland. Currently, the company is
having an operation in almost 86 countries. The company consists of the 339,000 employees
along with the sales of more than $130 billion in 2014. By the year 1906, Australia had become
the second largest export market for the company. Nowadays the company is making the sales of
more than $ 550 million across the world. Nestle include some famous brands such as Nescafe,
gourmet, Kit Kat, Maggi, Nestea, etc. (Nestle, 2017)
The company is having a good market and follow the marketing strategies. The company has
adopted the culture of different countries and has established their operations. The report talks
about the market segmentation, target audience and position of the brand in the market (Venter,
Wright, & Dibb, 2015)
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Market segmentation
Market segmentation is marketing concept that is used by the company's to understand the
customer's requirement by satisfying their needs. Different customers have different
requirement, it is difficult for the company to satisfy the needs of the customers at the same time
or collectively. This is the reason each and every organization is following market segmentation
strategies (Boone, & Kurtz, 2013). There are 4 types of market segmentation on the basis of
customer characteristics.
 Geographic area
 Demographic area
 Psychographic area
 Behavioural area
(Source: Das, 2014)
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Geographic segmentation: - This segmentation is based on the location of the customer.
The target audience preferences vary according to their locations. Geographic segmentation can
be done on the basis of the world or country region or rural area segmentation (Peck,
Christopher, Clark, & Payne, 2013).
 Nature; Nestle has segmented its current market for Nescafe Ice on the basis of
geographic weather such as warm and cold. Nescafe Ice is a coffee which may be
consumed with ice. During the cold season, most of the customer avoid consuming ice.
This shows that nestle make the product available according to the demand of the
product.
Demographic segmentation: - This segment includes the target market on the basis of the
age, gender, family size, income, etc. nestle main products are based on the generations
(Dietrich, et. al., 2015). Different products like Cerelac, lectogen, Koko, Krunch, Nido contain
different segment market according to the products.
Age: - Nestle offers it products to people that consists different age group. It totally depends on
the product which product they are offering. Each product of company contains some or other
minerals; those are inculcated by company according to different age group peoples.
 Nido; it is nutritious milk which is available for the children’s whose age group is 2 years
or above. This product contains 25 minerals and vitamin D which helps in the growth of
the children.
 Cerelac; ceralac contains a mixture of milk and rice which is available for the one year
baby. So the company targets new born babies. This product fulfills the demand of
nutrition in foods.
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 Nesquick, Koko Krunch; this is a chocolate milk for babies. It contains vitamin, protein,
and minerals that plays an essential role in child's required growth.
Income: - Nestle targets the customers on the basis of their income. Nestle product is also
available for the low-income group people. The most popular product of a company that is used
by the people is Nescafe coffee.
Psychographic segmentation: - This segment involves the market based on the values,
attributes, a lifestyle of the people, etc. (Hamka, et al., 2014).
 Lifestyle: - Lifestyle includes the living standard of the people. Products of a company
are in demand because of hike in the living standard of people. Peoples consume nestle
products as this indicate their rich and prosperous lifestyle.
 Social class: - The products of the nestle brand itself shows a class. People who consume
the products think that consumption of this product will add to the class.
Behavioural segmentation: - This market strategy is actually based on the consumer
buying behavior. It segregates the market on the basis of the knowledge of the customers, their
attitudes towards the product (Browne, Pullinger, Anderson, & Medd, 2013).
 Benefits: - The market of the Australia is segmented according to the requirement of the
product. Nescafe coffee is in demand by the people after knowing the benefits. Similar
with the cerealc that contains high nutrition that is beneficial for the child whose age is
less than a year. The products are more in demand because the customers keep
knowledge of the product and they have a preference for the products.
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Advantages and disadvantages of different segmentation
Segmentation
Base
Advantages Disadvantages
Geographic
segmentation
 Geographical segmentation
allows companies to consider
cultural differences of different
countries across the world.
 Provide an opportunity to the
company to expand the business
globally after understanding the
culture of the countries
(Nasiopoulos, Sakas, Vlachos, &
Mavrogianni, 2015.
 In this segmentation, a
company needs to assume
that all the customers are
similar and have similar
demands.
Demographic
segmentation
 It is very simple to apply for the
companies. Companies can
consume the data available with
the government.
 Required data related to the
consumer and their preferences
can easily obtain by the
company (Gunter, & Furnham,
2014).
 Different consumers of a
different age group and
income group have
different demands. So a
company may find
difficulty in segregating the
group.
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Psychographic
segmentation
 The organization can give better
insight to the customers in
understanding the needs and
motives of the customers.
 A better understanding of
customer needs may help a
company to deliver a better
experience to the customers (Bo
Liu, et.al., 2014).
 Organisations who consider
this segment need to
acquire appropriate
data/research that can be
used by the company for
segmentation.
Behavioural
segmentation
 This segmentation is often used
by the company to attract the
heavy users. It can also be
utilized to identify the
knowledge that customer has
regarding the product that
company is offering.
 This segment is dependent
on the detailed market
intelligence, database,
testing, and
experimentation. This
makes it an expensive
process (Vinerean, Cetina,
Dumitrescu, &
Tichindelean, 2013).
Target market
A target market is a group of individuals which is targeted by the company for their products.
The company target audience on the basis of segmentation. Nestle distributed their target market
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because of a numerous number of requirements and wants of the company. Nestle decided to
choose differentiated marketing (Gilani, Kazemi, Asadi, Samadzadeh, & Atashpanjeh, 2014).
This shows that company target different customers according to the requirement of the customer
for different products. This is done on the basis of different ages, occupation, season and climate.
Primary and secondary target market
The company makes separation in the target market. They target on the basis of a primary and
secondary target market. The primary target audience includes the customers who are most likely
to buy the product. On the other hand, the secondary market includes who second most important
customers for the company. Nescafe is a preferable product for the consumers (Begum, 2015).
The primary target market includes people who like to prefer coffee on the regular basis without
any hassle. Customers who want to enjoy different flavours of the coffee (latte, mocha,
Cappuccino). Demographic segmentation is a primary target for nestle company. The age group
which is considered as the primary target is 20-35 of middle and upper class. Nestle cerealc is
increasing in the demand. This is the reason customer consider new born babies age of 1-5 years
into the primary target market.
The secondary target market of a company include the people of the age group of 35-50 or 5-20.
The reason begins there are some of the products like nestle kit kata and Maggi which is mostly
preferred by the people having the age group of 5-20. The Nescafe one of the products of the
company is least in the demand by the age group of 35-50. Apart from the age group, income
group also matters. The average and low-income group are considered in a secondary target
market. The below given is the customer profile of the company. This customer profile is based
on the segmentation. This shows that from each segment how company targets the audience.
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Consumer profile of nestle company
Geographic dispersion Urban suburban position (no rural positioning done as it is
not cost-effective)
Family life cycle Full nest-I
Social stratification Upper- upper class
Lower- upper class
Upper- middle class
Age segments Infants (0-5)
Mothers (18-45)
Children’s, adults, youth and teenagers of different age
group
Income Average
Above Average
High-income group people
Gender Male and female, including children’s
Lifestyle or social class People who maintain a high standard of living and people
who believe in social class.
Social class Some people believe that consuming products of a
company will add value to their class and social status.
Occupation Youth, working professionals, athletes, health enthusiast,
and sports enthusiasts.
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Positioning
Positioning defines as the place that a brand captured in the mind of the customers which is
different from its competitors (Armstrong, Kotler, Harker, & Brennan, 2015). Nestle is making a
place in the market very easily as compared to its competitors.
The above image shows the perpetual map of nestle company in which position is visible. The
company position is in between the high price and high quality. The company is following
different strategies to maintain the position in the market. There are some of the strategies which
are explained below that company follows (Shank, & Lyberger, 2014).
Strategy related to product differentiation: - Nestle makes available different products to their
customers. The company provide a product such as Nescafe coffee, Maggi, Nescafe ice, etc.
company provides different products which make the brand popular in the market. The
customers who are not aware of the product will get to know about the product. Maggie includes
instant Maggi in 2 minutes which contain minerals and vitamins (The Next Practice, 2017).
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Strategy related to Channel differentiation: - Channel of distribution followed by a company
is unique. The company believes in delivering the products to the customers through experienced
market salesman and transportation. Hence, their products are going to be easily available to the
customers (Silva, 2013).
Strategy related to Image differentiation: - The logo of the company is unique and different
from the competitors. The customer can easily choose nestle in the market for its effective
benefits for nestle products. The logo presents the image of the company.
Recommendation for positioning strategy
Nestle can work on the positioning strategy of the company. The company should try to
implement the standard testing ways. The standard testing will reduce the faults in the products.
The products introduced by the company need to be tested and there should be some standard.
Products are offered from infant to youth or aged. So a company should try to deliver best
quality products that will enhance the position of the company in the market. Cerealc is one of
the products which are offered to infants. Hence, the company should make sure that they are
delivering a tested product. Earlier while testing food quality it was found that Maggi contains
lead in it. This case created an impact on the positioning of the company. The customers of the
company either switched the brand or started using Maggi again after some time.
This shows that the company needs to focus on the testing of the product and the quality of the
product. Positioning is based on the quality of the product. This also impacts the demand and
sales of the product. The company needs to maintain the standard of the products that they are
offering to the customers. This will help in enhancing the position as well as the demand of the
product.
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Conclusion
The report throws light on the segmentation, targeting and positioning of Nestle. The company is
a largest food processing company. With the change in the time, there is a change in the demand
of the customers. The company believes in providing quality services to their customers to
increase the efficiency of the target audience. This target audience is separated into different
segments. Segmentation is done by the company considering the demands of the product by the
customers (Keegan, & Green, 2015). The quality product and services of the company will
enhance the position of the company in the market. To enhance or to maintain the positioning of
the company follows some strategies. The company should test the product before introducing it
into the market.
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References
Armstrong, G., Kotler, P., Harker, M., & Brennan, R. (2015). Marketing: an introduction.
Pearson Education.
Begum, T. (2015). Critical analysis of Amra Korbo Joy (AKJ).
Bo Liu, H., McCarthy, B., Chen, T., Guo, S., & Song, X. (2014). The Chinese wine market: a
market segmentation study. Asia Pacific Journal of Marketing and Logistics, 26(3), 450-
471.
Boone, L. E., & Kurtz, D. L. (2013). Contemporary marketing. Cengage learning.
Browne, A., Pullinger, M., Anderson, B., & Medd, W. (2013). The performance of practice: An
alternative approach to attitudinal and behavioural ‘customer segmentation’for the UK
water industry.
Das, S., (2014). Nestle Slim Milk: Segmentation, Targeting and Positioning. Viewed on 31st
August 2017, https://surabhiudas91.wordpress.com/2014/09/26/nestle-slim-milk-
segmentation-targeting-and-positioning/
Dietrich, T., Rundle-Thiele, S., Schuster, L., Drennan, J., Russell-Bennett, R., Leo, C., ... &
Connor, J. P. (2015). Differential segmentation responses to an alcohol social marketing
program. Addictive behaviors, 49, 68-77.
Gilani, S. R. M., Kazemi, M., Asadi, H., Samadzadeh, G. R., & Atashpanjeh, A. R. (2014).
Market segmentation of sport tourism in Iran for foreign tourists regarding culture and
modeling of target market. Asian Journal of Research in Marketing, 3(6), 192-200.
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