This report discusses the strategic marketing management of Nestle Global in India, including the macro and micro environment, marketing plans, and the role of marketing in achieving organizational goals.
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Running head: STRATEGIC MARKETING MANAGEMENT OF NESTLE GLOBAL STRATEGIC MARKETING MANAGEMENT OF NESTLE GLOBAL Name of the Student Name of the University Author Note
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1STRATEGIC MARKETING MANAGEMENT OF NESTLE GLOBAL Executive Summary The chief purpose of this report is to confer about the buyer’s attitude and the conclusion building procedure in connection to Nestle Global in India. The report mainly discusses the macro environment as well as micro environment relating to Nestle Global in India. This report also takes into account the frameworks as well as the approaches which can assist in examining the present situations of Nestle Global in India. In this report, a thorough examination will be done on the marketing plans as per the objectives of the organization and accordingly the part played by the company in attaining the goals.
2STRATEGIC MARKETING MANAGEMENT OF NESTLE GLOBAL Table of Contents Introduction................................................................................................................................3 Marketing Environment.............................................................................................................4 SWOT Analysis.....................................................................................................................4 PESTLE Analysis...................................................................................................................8 PORTER’S 5 Forces............................................................................................................10 Positioning and Targeting........................................................................................................12 4 C Concept..........................................................................................................................15 Strategies for Growth and Marketing Objectives.....................................................................17 BCG Matrix..........................................................................................................................17 Ansoff Matrix.......................................................................................................................18 The Marketing Mix..................................................................................................................19 Budget, Measurement and Control..........................................................................................20 Conclusion................................................................................................................................22
3STRATEGIC MARKETING MANAGEMENT OF NESTLE GLOBAL Introduction In this report, our discussion will be on Nestle Global, one of the premium and old multinational organization, which can be said as a household name. The report will analyze the entire marketing plan which will use various strategy models like BCGMatrix, Porter’s Generic Strategy, SWOT and PESTLE analysis as well as taking 7P and 4C to analyze the positioningstatementand marketingmixof thecompany. In themarketingplanthe discussion will support the organizational objectives, demonstrates the understanding of the stakeholder needs and will help to show consideration of external and internal environment, which will help to outline the plan to be evaluated. Nestle, a multinational enterprise from Switzerland specialized in making food and drink, has headquarter in Vevey, Vaud in Switzerland. It can be termed as the biggest food company in the world in terms of credits and the other metrics. The products include food for babies, edible grains, dairy commodities, refreshments, chilled food along with the ice cream, pet foods and so on. The company started in 1866 as Anglo-Swiss Condensed Milk Company. Henri Nestle had manufactured baby food in 1867 and afterwards, the company combined with the Anglo-Swiss organization to become the Nestle Group of today. There are over 300,000 lakh employees in the company which operates in 189 countries and has 447 factories, contributing in the revenue of CHF 92 billion. The chief intention of this report is to discuss the company’s dairy commodities. In relation to Nestle Global, the report will discuss on the whole marketing plan as well as the decision making. The report also examines micro as well as macro environment of the company by using the PESTLE structure. The report discusses about the important as well as the threatening factors to the company. This report also focuses on the marketing strategy of Nestle in India in relationship to the goals of the organization and the part that marketing can play in fulfilling the objectives.
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5STRATEGIC MARKETING MANAGEMENT OF NESTLE GLOBAL Concentrating more on R & D to handle ethicalissues EXTERNAL FACTORS Figure 1.1: SWOT Analysis of NESTLE India Source: Created by the Author Strengths:Factors which help to build or enhance the business, are discussed below: World famous brand:Nestle is listed in Fortune 500 Company and the largest foodcompany globally measured in terms of revenue. Nestle India does exclusivebranding of their various products or brands which helps the company to create consciousness about their differentcategories of brands in the marketplace. This also helps them to held on the brand image, because if a branded product like Maggi is concerned, which was actually affected in India, it does not have less or nothing on the sale of Coffee or Tea or other products of the company. Extensive distribution system:The various and variedproductportfolioof Nestle has successfully cracked not only the urban market, but the ruralmarket as well. The distribution methods are suitable for the locality as well and disintegration inlogistics and supplychain, including road side vendors, movable street markets, door-to-door sellers & pharmaceutical shops has aided the organization to make theirproductsseeable in the marketplace. Broad Product portfolio:Nestle Global has above 8000 products under its brand which includes beverage products like coffee, mineral water, breakfast cereals, soups and sauces, and many more. Nestle have deep variety of products under each category to fulfill the various desires& wants of the buyers, according to their tastes and preferences.
6STRATEGIC MARKETING MANAGEMENT OF NESTLE GLOBAL Large workforce:Nestle have over 300,000 global employees who are working on continuous basis to make the products or brands accessible in everywhere possible. This will help the company to counter its competitors in various places worldwide. Research & Development centers:Nestle possess the largest food & nutrition examination organization globally, where approximately 5000peopleare engaged in research and development of the products, as well as the company invests money and do examine partnerships with business allies and universities. The company has 21 research centers present worldwide. Brand equity:Nestle is the 36th top rank brand in the world as of 2016 which essays many things about the brand equality of the company. It is the commercial value that assumes from the approach of the consumer towards the brand name of Nestle. Weaknesses: Factors which should be resolved or reduced are discussed below: Controversy relating with Maggi:Maggi was banned in India in 2015 because it contained preservatives that were damaging the product. This afflicted thequality nameand brand equityof Maggi as well as Nestle which were continued for a long period of time. However, it was re-launched and Nestle attempted to assure the people about the quality of Maggi and spreading awareness about the product (Garg 2015). Brand architecture:Nestle possess a number of brands under the same category so administering such a huge number of exclusive brands can create clash of interest. In longer run it may hamper the growth of the company, or exit of a particular product from the same brand from the marketplace. Legal & consumer issues:Though Nestle is a worldwide popular food mammoth, it has faced disputes over the years, for example, boycotting the Nestle baby food formula,
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9STRATEGIC MARKETING MANAGEMENT OF NESTLE GLOBAL PESTLE Analysis PESTLE analysis is needed for critical frame working to judge business acts through identification of the basic political, economic, social, technological, legal and environmental forces which have influences on the industry (Armstronget al. 2015). Figure 1.2: PESTLE Analysis Source: Created by the Author Political Factors:Nestle Global has its business in many countries. The government law and control are separate for separate places. Nestle have to target on these governmental motions like taxation, import export excise duties, government permission to enter in to the target section and also to announce hygiene products granted by the regulated bodies. Nestle must acknowledge and consider every risk that could be included in the latest flows keeping in mind the stability of the government. Albeit Nestle is such an organization which actually
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10STRATEGIC MARKETING MANAGEMENT OF NESTLE GLOBAL promotes the government health instructions by maintaining the quality principles, rules and regulations. Economic Factors:Various countries have various level of improving the economy, which is different everywhere. So, Nestle has to perform dissimilar policies relating to financial field for distinct targeted sections. Setting the product price is a major decision to perform in the time of strategizing the financial policies, which are set according to the increase speed and the purchasing power of the sections. Social Factors:The logic and assumptions of the consumers control the actions of a business. The civilization, behaviour, standard and ethics enforce Nestle to submit the perfect product to the right segment. Nestle till now has treated the social outlook well. The organization has properly understood the idea the importance of the changing attitude of the consumer behaviour. TechnologicalFactors:Technologyprovideslotsofopportunitiesforthe improvement of fresh products or the existed ones. Fresh approaches of marketing such as e- commerce and internet very important to target in this modern time, like the use of state of the art technology and meeting the worldwide benchmarks. The large use of social media platforms has reduced the gap between the direct communication between the customer and the company. Legal Factors:It involves the juridical environment of an organization and its control on the operations to face and satisfy the want and decrease the price. Like, Nestle has to pursue the health as well as security laws for their employees and to manufacture hygiene products for the customers. Environmental Factors:The planet is more alert nowadays to possess neat and clean environment.Nestlehavetopayattentionontherulesandregulationsandhaveto
11STRATEGIC MARKETING MANAGEMENT OF NESTLE GLOBAL manufacture healthy food with environmental friendly operations. Nestle also pays attention towards the social contribution. PORTER’S 5 Forces Porter’s Five Forces Model is a major tool to analyse the industrial criteria and to improve the business plans for Nestle. There are five various factors that will be discussed to feature the attractiveness and productivity of the marketplace(Armstronget al. 2015): Figure 1.3: PORTER’S 5 FORCES Source: Created by the Author Threat of New Entrants:The new entrants are always a threat for the existing company if the market is lucrative but if the marketplace has been blocked to a definite resource and it possess less developmental areas, it becomes hard for nrewcomers to get into
13STRATEGIC MARKETING MANAGEMENT OF NESTLE GLOBAL position in the food manufacturing industry but few prime rivals are present in the industry like Kraft Foods and Groupe Danone. Positioning and Targeting Market segmentation is the process of breaking down the market of promising customers into various groups on the basis of certain features or characteristics. The four bases for segmenting consumer market are as follows (Fahy and Jobber 2015): Demographic Segmentation: Here, the market will be segmented by Nestle on variables like age, gender, marital status, family size, income and many more. They can introduce some products which will be meant for couples and some products only for children. Geographic Segmentation: In this category, Nestle have to introduce their products according to the taste and preferences of the people of different regions. Bottled water can be marketed mainly to the places where water is scarce. They have to categorize their products accordingly. Psychographic Segmentation: Here, Nestle have to divide the products according to the personality, lifestyle and attitude of the customers. Consumer behaviour plays a vital role in this segmentation. BehaviouralSegmentation:Nestlecansegmentthemarketaccordingtothe behaviour, usage, preference, choices and decision making of the people. The market strategy should be preferred is segmenting. Until and unless proper segmentation is done, targeting and positioning will be baseless. Segmentation forms the pillar of the success of the business, as it helps to divide the customers according to the bases ofsegmentation,andaccordinglyNestlecanintroducetheirproductsasperthe
14STRATEGIC MARKETING MANAGEMENT OF NESTLE GLOBAL characteristics of the four bases of segmentation, so that each and every product get attracted and will help to earn revenues and help the company to grow by length and breadth. Figure 1.4.1: Positioning Map 1 of Nestle with its Competitors Source: Created by the Author
15STRATEGIC MARKETING MANAGEMENT OF NESTLE GLOBAL Figure 1.4.2: Positioning Map 2 of Nestle and its Premium Competitor Source: Created by the Source 4 C Concept The4C’sofmarketingmixexistsofConsumer,Cost,Convenience,and Communication, and targets marketing and selling of a product as well as conversation with the target audience from the start of the process till the end. Nestle can use this concept to be benefited from the marketplace (Varma and Ravi 2017): Customer Wants and Needs:This marketing strategy is important for Nestle to seek generosity of their buyers. Once you figure out your target audience, it becomes very easy to manufacture a product that can be beneficial to them. The customer ultimately makes the
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16STRATEGIC MARKETING MANAGEMENT OF NESTLE GLOBAL decision to purchase and is therefore the most valuable wealth in any kind of marketing strategy. Cost:It is necessary to decide the overall cost, and not the price of the products of Nestle. Cost not only includes the price, but also includes the time it taken by the customer to get to the location to purchase the product. Cost can also include the advantage of the product. Convenience:Convenience can be termed as a customer-oriented approach to this marketing strategy. The total cost of the product will showcase the convenience to the target audience. The aim is to make the product simple and cost effective for the customer to attain the product. Communication:It is a customer-oriented approach to the assignment of selling products. It requires interaction between the buyer and seller. This marketing strategy can be easily implemented through the help of social media by Nestle, as the market of India is one of the largest markets of internet users in the world. Marketing a product on the social media platforms allow them to communicate with the people on personal levels and will lead to greater brand loyalty among the customers. The concept of 4 C can be hugely profitable to any marketing strategy. This strategy enforces Nestle to understand their audience before they begin to develop a product. This framework requires interaction throughout the entire process, from beginning to end, and starts with understanding what the customer wants out of your product.
17STRATEGIC MARKETING MANAGEMENT OF NESTLE GLOBAL Strategies for Growth and Marketing Objectives BCG Matrix Figure 1.5: BCG Matrix of Nestle Source: created by the Author TheBoston Consulting Group'sproduct portfoliomatrix(BCG matrix) is outlined to aid with long-term crucial planning, to aid a business to acknowledge growth opportunities by examining its portfolio of products to decide the place of investment, to discontinue or develop products.BCG matrix(or growth-share matrix) is a corporate preparation tool, which is used to represent the company’s brand portfolio on a quarter along comparative market
18STRATEGIC MARKETING MANAGEMENT OF NESTLE GLOBAL share axis (horizontal axis) and speed of market growth (vertical axis) axis(Armstronget al. 2015). Figure 1.6: Ansoff Matrix of Nestle Source: Created by the Author Ansoff Matrix TheAnsoffMatrixisacrucialplanningtoolthatsupportsastructuretohelp executives, higher level managers, and marketers to frame strategies for future growth. This
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19STRATEGIC MARKETING MANAGEMENT OF NESTLE GLOBAL will help Nestle to strategize the plans efficiently so that the products can be properly positioned in the targeted market(Armstronget al. 2015). The Marketing Mix Figure 1.7: Marketing Mix of Nestle Source: Created by the Author Product:Nestle supplies an ample range of products with their channel expansions in the market. They are supplying the range with quality to the consumers. Price:The cost is reliant of each single product present in the market. For example, Nescafe and Maggi, the clearly proved leaders are priced with higher gross profits for the company as compared to its competitors. Place:Nestle has been showcasing their brands in the supermarkets and malls. It manages sales and distribution network of their own throughout the Indian market to supply their product, which includes canteens of colleges and hospitals, other companies, hospitals and nursing homes and public places. Promotions:Nestle regularly uses promotion as a prime source to reach their customers, and uses TVC’s and ATL marketing to match the taste and preferences of the consumers and try to advise them to buy the products. The company has its presence online through some smart creative work, to obtain a high brand recall value (Kotler and Armstrong 2015).
20STRATEGIC MARKETING MANAGEMENT OF NESTLE GLOBAL People:Nestle India has been selecting a huge number of people in their company. They train their employees to solve the problems of their customers and arrange better customer service. Process: Nestle has been producing the products by converting it using better technology and ideas. The way Nestle has been using its vending machine to deliver the customers easily shows that they have understood the necessities of the consumers in India. Physical Evidence:Nestle India has been building a better proof of connectedness by setting up the coffee corners with their logo of Nescafe in vending machine. Budget, Measurement and Control Proposed Budget for the Marketing Activities of Nestle
21STRATEGIC MARKETING MANAGEMENT OF NESTLE GLOBAL Budget inINRJ ANFEBMARAPRI LMAYJ UNEJ ULYAUGSEPTOCTNOVDECTOTAL ONLI NE PRESENCE Website Development4,0004,5005,0005,5006,0006,5007,0007,5008,0008,5009,0009,50081,000 Website Maintenance1,0001,2001,4001,6001,8002,0002,2002,4002,6002,8003,0003,20025,200 Website / Email Hosting1,1001,4001,7002,0002,3002,6002,9003,2003,5003,8004,1004,40033,000 Blog1,2001,5001,8002,1002,4002,7003,0003,3003,6003,9004,2004,50034,200 Directory Listings6007008009001,0001,1001,2001,3001,4001,5001,6001,70013,800 Search Engine and Social Media Optization1,2001,3001,4001,5001,6001,7001,8001,9002,0002,1002,2002,30021,000 Other (click insert/row from menu)5006007008009001,0001,1001,2001,3001,4001,5001,60012,600 ONLI NE PRESENCE SUBTOTAL9,60011,20012,80014,40016,00017,60019,20020,80022,40024,00025,60027,200220,800 Budget inINRJ ANFEBMARAPRI LMAYJ UNEJ ULYAUGSEPTOCTNOVDECTOTAL PUBLI C RELATI ONS Press Releases9001,0001,1001,2001,3001,4001,5001,6001,7001,8001,9002,00017,400 Media Relations1,0001,2001,4001,6001,8002,0002,2002,4002,6002,8003,0003,20025,200 Wire/ Distribution Fees1,1001,3001,5001,7001,9002,1002,3002,5002,7002,9003,1003,30026,400 Press Kits1,2001,4001,6001,8002,0002,2002,4002,6002,8003,0003,2003,40027,600 Other (click insert/row from menu)4005006007008009001,0001,1001,2001,3001,4001,50011,400 PUBLI C RELATI ONS SUBTOTAL4,6005,4006,2007,0007,8008,6009,40010,20011,00011,80012,60013,400108,000 Budget inINRJ ANFEBMARAPRI LMAYJ UNEJ ULYAUGSEPTOCTNOVDECTOTAL PROMOTI ONS Print Advertising9001,1001,3001,5001,7001,9002,1002,3002,5002,7002,9003,10024,000 PPC, Digital Banners, Retargeting Campaigns8009001,0001,1001,2001,3001,4001,5001,6001,7001,8001,90016,200 Social Media Promotional Ads7008009001,0001,1001,2001,3001,4001,5001,6001,7001,80015,000 Tradeshows1,3001,4001,5001,6001,7001,8001,9002,0002,1002,2002,3002,40022,200 Event Networking / Sponsorships1,4001,5001,6001,7001,8001,9002,0002,1002,2002,3002,4002,50023,400 Promotional I tem Give- a- ways1,5001,6001,7001,8001,9002,0002,1002,2002,3002,4002,5002,60024,600 Direct Mail (print and email)1,4501,5501,6501,7501,8501,9502,0502,1502,2502,3502,4502,55024,000 Telemarketing1,0001,2001,4001,6001,8002,0002,2002,4002,6002,8003,0003,20025,200 Prospect Lists1,1001,4001,7002,0002,3002,6002,9003,2003,5003,8004,1004,40033,000 Other (click insert/row from menu)6007008009001,0001,1001,2001,3001,4001,5001,6001,70013,800 PROMOTI ONS SUBTOTAL10,75012,15013,55014,95016,35017,75019,15020,55021,95023,35024,75026,150221,400 Budget inINRJ ANFEBMARAPRI LMAYJ UNEJ ULYAUGSEPTOCTNOVDECTOTAL TOTAL225,950.00261,750.00297,550.00333,350.00369,150.00404,950.00440,750.00476,550.00512,350.00548,150.00583,950.00619,750.00 Annual Total5,074,200.00 Key Performance Indicators KPI or Key Performance Indicators are developed for facilitating Nestle to track or measure progress towards defined marketing goals that it intends to attain through employing relevant promotional activities. Through measuring right marketing KPIs, Nestle will be capable to make necessary adjustments in its promotional strategies or budgets. Certain KPIs
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22STRATEGIC MARKETING MANAGEMENT OF NESTLE GLOBAL have been selected in order to measure the success of the marketing activities those will be implemented for promoting the offerings of Nestle are indicated below (Morganet al. 2018): Advertising through press releases and print media is intended to increase revenue by 10% in the first year of marketing strategy launch Social media promotional campaigns is intended to increase web traffic by 15% in the first year of implementing this promotional campaign Success of product advertising on social media platforms can be measured by gradual increase in social media likes after 6 months of advertisement launch Increasing number of website visits along with increased social media engagement from the consumers within the six months of website maintenance and development Increase in the content shares by 15% in the 6 months’ span of promotional strategy launch by Nestle through email hosting, social media optimization and updated product posts shared on online platforms (Menonet al.2015). Conclusion From the above report, it can be concluded that the customers of Nestle Global consist of young people who want to maintain a healthy lifestyle. The distinct targeted segments of the organisation include employed professionals as well as the sports admirers who consumes the product so to stay fit and healthy. There are factors which are important for Nestle Global are financial and social factors which can improve the business of the company and have a competitive edge. The company establish the products to fulfil the needs of the modern day customer. The aim of the company is to progress upwards as the largest food manufacturer company globally that can serve products of superior quality. The company has to improvise new technical ideas to sustain in this competitive market, and have to engage the customers always to retain them.
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24STRATEGIC MARKETING MANAGEMENT OF NESTLE GLOBAL Morgan, N.A., Whitler, K.A., Feng, H. and Chari, S., 2018. Research in marketing strategy.Journal of the Academy of Marketing Science, pp.1-26. Varma, G.R. and Ravi, J., 2017: Strategic Analysis on FMCG Goods: A Case Study on Nestle.
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