Marketing Fundamentals 1: An In-Depth Analysis of Nestle Australia

This report provides a comprehensive marketing analysis of Nestle Australia, focusing on its baby milk product line. It begins with an overview of the company and its operations, followed by a situational analysis using Porter's Five Forces, PESTLE, and SWOT frameworks. The report delves into competitor analysis, examines the consumer market, and explores factors influencing consumer buying decisions. Key marketing concepts such as segmentation, targeting, and positioning are discussed, alongside a detailed examination of the marketing mix (product, price, place, and promotion). The report concludes with a summary of findings and references used.

Marketing Fundamentals

Marketing Fundamentals 1
Contents
Introduction......................................................................................................................................2
Overview of company......................................................................................................................3
Situational analysis..........................................................................................................................3
Porter’s five forces.......................................................................................................................3
PESTLE analysis.........................................................................................................................5
SWOT analysis............................................................................................................................6
Competitor’s analysis......................................................................................................................7
Consumer market.............................................................................................................................8
Factors affecting the consumer buying decisions........................................................................8
Concept of Segmentation, Targeting and positioning.....................................................................9
Segmentation...............................................................................................................................9
Targeting....................................................................................................................................10
Positioning.................................................................................................................................10
Marketing mix...............................................................................................................................11
Conclusion.....................................................................................................................................13
References......................................................................................................................................14

Marketing Fundamentals 2
Introduction
The report will provide a detailed description related to the key components of a Marketing plan
for an organization's product and service. The company that has been selected for the analysis is
Nestle Australia. The company is known as one of the world’s leading Nutrition, Health and
Wellness Company with the head office in Switzerland. Along with this, the company has
operation and its offices, research, and development centers across the world. The report includes
the full analysis of the marketing environment, target market and the marketing strategy of the
company.

Marketing Fundamentals 3
Overview of company
Nestle is the world’s largest food and beverage firm and has more than 2000 varieties. The
company operates the business activities in more than 191 countries globally. The company
came into the existence in the year 1886 and since then the purpose of the company is to improve
the quality of life and contributing to a healthier upcoming years (Nestle, 2017). The aim of the
company is to inspire the people of Australia to live healthier lives and through this; the
company is able to ensure that they are able to achieve the long-term success. The products that
are offered by the company include Coffee, recipe bases, Medicated lozenges and sauces,
noodles, cooking milk, baking ingredients and some products related for the baby and toddler
nutrition. Out of these products the core product of the company is baby milk products and this is
the product that has been selected for the analysis (Nestle, 2017). The baby milk products
include Nesquick, Koko Krunch, Cerelac and Nido.
Situational analysis
Porter’s five forces
Porter's five forces model is an essential framework that supports the company in analyzing the
industrial parameters and these forces identify how the decisions of marketer and customers get
influenced (Rothaermel, 2015).
Bargaining power
of suppliers
 Nestle is well known in the market for its strong relationships with
the suppliers across the world due to its vast buying power as the
company believes that the quality of products is important.

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 The company also provide the necessary guidelines to the suppliers
to reduce the expenses due to which the suppliers deliver the quality
products.
Bargaining power
of customers
 The bargaining power of the consumers is high as an enormous
number of competitors of the company influence the preference of
customers in the Australia market.
 Nestle is able to deliver the quality goods to the end users that help
the company in grabbing the attention of potential customers
(Njambi, Lewa & Katuse, 2015).
Threats of new
entrants
 There are many companies who entered the market but Nestle is
having good reputation and brand image in the market due to which
the company has fewer threats of new entrants.
 It is challenging for the new entrants to work on the quality and to
offer the quality products to its consumers in the presence of Nestle.
Threat of
substitute goods
 There is a high threat of substitute goods as the products provided
by the company are daily use products which are provided by many
other companies as well.
 Considering, the threat the company has to bring the innovation in
the products so that the company will be able to grab the attention
of customers.
Competitive
rivalry
 The company has a strong position in the food processing
manufacturing but has to face the competition from the rivals who

Marketing Fundamentals 5
deals in baby food products. The rivals are Heinz Dominate, Mead
Johnson, Abbott, and Groupe Danone (Njambi, Lewa & Katuse,
2015).
 The people of Australia are taking the benefit of this competition as
they can enjoy the products at fewer prices or with discounts.
PESTLE analysis
PESTLE analysis is a framework that helps the company to determine the external factors that
can influence the decisions taken by the companies (Clarke, Friese & Washburn, 2015).
 Political factors- The rules and regulations formed by the government can create an
impact on the working of the company. These rules and regulations include taxation,
import-exports, government permission. Nestle always follow regulations in Australia so
that the company can smoothly operate its business activities in the country.
 Economic factors- The economy of country is developed with the largest diverse market
economies of the world. The worth of exports and imports collectively is equal 41% of

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GDP with the regular implemented tariff rate is 1.9%. This shows that the company can
easily perform the operations related to exports and imports (Economic Freedom, 2017).
 Socio-cultural factors- The culture lifestyle and the preference of the customer’s creates
an impact on the company. In Australia, maximum numbers of peoples are becoming
health conscious due to which the demand for the company’s products might increase and
they can try to introduce new products in the market (Haseeb, 2017).
 Technological factors- Nestle gets affected with the introduction of the advanced
technology. The company is making use of the technology in numerous business
operations such as maintaining the databases with the use of the software. The company
should make sure that they are adopting new technologies in their business.
 Legal factors- Company has to implement the health and safety laws for their employees
along with this the company follows the regulations in producing hygiene products to
enhance the customer satisfaction.
 Environmental factors- Company has to take the responsibility for the clean
environment and they are responsible for healthy food with environmental friendly
operations (Schaltegger & Wagner, 2017). Some of the laws that need to be followed
include: Waste Management and Pollution Control Act 1998 (NT), Environmental
Protection Act 1997 (ACT) and many others.
SWOT analysis
Strengths Weakness
 The company has strong research and
development capabilities that are
 The company only make use of
advertising for promoting the products
in the market which is one of the

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growing.
 The company is highly-diversified and
offer a huge variety range in baby
products.
 The company has strong relationships
with brands like Coca-Cola, Colgate
Palmolive and General Mills (PESTLE
analysis, 2015).
traditional ways to promote product.
 The products offered by the company
seem to be old fashioned which needs
to improved considering the modern
lifestyle of people.
Opportunities Threats
 The company has the growth
opportunity in the online retail.
 The company has the growth in the
markets of China and India.
 The company has the opportunity to
launch new products in the market as
maximum numbers of customers are
becoming health conscious and due to
this, they are demanding for products
like energy drinks (Hollensen, 2015).
 The company might face the threat
from the giant retailers that include
Heinz Dominate and Donone related to
the cut in the prices of products.
 Changes in the preference and choices
of the customers are one of the
emerging threats for Nestle in Australia
market.
Competitor’s analysis

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The competitors of the company include Heinz Dominate and Groupe Danone is strong
competitors of the company. These companies give strong competition as they offer the similar
range of products like Nestle. Heinz Dominate is well known for high quality, great taste and
nutrition and Groupe Danone is leading Food Company that offers healthy and nutrition baby
products (Njambi, Lewa & Katuse, 2015).
The quality standards of the Heinz (Kraft Heinz) don’t meet the high-quality standards of Nestle
due to this the price kept by the company for their products is high then the Kraft. These
competitive companies spend a huge amount of marketing and promotion activities so that they
can attain good position in the market. Though, Nestle has to bring improvement in the
promotion and marketing strategy (Nestle, 2017).
Consumer market
A consumer market is defined as a market where the goods and services are purchased by the
end users. Every customer has diverse choices and preferences in the single market (Solomon,
2014). Thus, the buying behavior for the product is influenced by some of the factors.
Factors affecting the consumer buying decisions
 Psychological factor affects the purchase decision of the customer. It includes motivation,
perception, learning, attitudes, and beliefs. Many people in Australia might get influence
due to the other customers (Rani, 2014). For instance, Cerelac; the different flavours and
the quantity of nutrition of the product are liked by the different customer that might
influence the other buyers.

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 Cultural factors consist of the consumer’s culture, social class, and subculture.
Australians are health conscious due to which they like to consume products having high
quality and are suitable for healthy life (Rani, 2014).
 A situational factor might influence the people depending on the situation due to this end
users might get influenced in certain situation.
Concept of Segmentation, Targeting and positioning
Segmentation
Segmentation is marketing concept that helps the company in classifying the consumers on the
basis of Demographic, Geographic, Behavioural and psychographic.
(Source: Keegan & Green, 2015)
 Geographic- Company has segmented its product Nesquick and Koko Krunch on the
basis of weather of the regional and local places.

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 Demographic- Nestle offers a wide range of products and these products are available
for different age groups such as Cerelac; Nido; a nutritious milk, available for the age
group of 2 years or above. Nesquick and Koko Krunch; chocolate milk for babies. Apart
from the age group the company also targets the people from different income. The
products offered by the company are available for the middle and high income grouped
people in Australia (Nestle, 2017).
 Psychographic- The people having the faith in lifestyle and social class make use of the
products provided by Nestle.
 Behavioural- The Australian market is segmented considering the need for the product.
Nescafe coffee was in demand in Australia when Australians get to know about the
benefits of the products.
Targeting
Targeting refers to as the group of individuals that are targeted by the company for products and
services. The company makes use of the differentiated targeting strategy in which the company
targets the buyers considering the need for the customers for different products. The primary
target of the company is the people with the age group of 2 or above and parents of children’s in
between the age of 25-35 years belongs to the middle class (Nestle, 2017).
Positioning
Positioning refers to as a place that is occupied by the company in the mind of the customers.
The place of the company is in a quadrant of high price and high quality which is clear from the
below-positioning map of the company.

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Branding strategy
The branding strategy of the company covers the logo of the company which is an important part
of the Company’s corporate identity. The ‘nest’ was a graphic translation of Nestlé’s name is
meant as little nest.
Marketing mix
 Product- Nestle offers the wide range of products with the line extension product mix in
the Australian market. The core product of the company is Cerelac which is a baby milk
product. Cerelac comes in different flavours with innovative packaging and labeling with
a system of Nestle on it. The product contains the vitamins and minerals that are essential
for the babies (Patil & Bach, 2017).
 Price- Company provides the discount and coupons for their products and they make use
of the price skimming strategy. It is a strategy in which the company charges a huge
initial price that is paid by the company. When the demand of the initial customers get

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satisfied then the company lower the prices to attract other customers (Spann, Fischer &
Tellis, 2014).
 Place- The company provides it product malls and supermarkets along with this the
company has own sales and distribution across Australia. The company makes use of the
Intensive distribution coverage strategy with the help of this company try to make the
product available in a maximum number of outlets.
 Promotion- Promotion of the products is done by endorsing the product with the
celebrities. Along with the advertisement, the company also make use of the social media
concept in which the company promote their products with the use of the social media
(Facebook, Twitter, LinkedIn, etc.) and try to attract the customers who want to consume
healthy products.
 People- Company hires the people on the basis of skills which include effective
communication. Nestle provide training to their employees so that they can effectively
deal with customers.
 Process- Company manufactures the product with the use of new ideas and technology.
In Australia, the company makes use of the vending machine which makes the process of
the company easier.
 Physical evidence- Nestle is forming a better evidence connectivity by providing the
baby milk products in the departmental stores with the logo of Nestle.
 Partnerships- Nestle is having strong relations with the companies like Coca-Cola,
Colgate Palmolive and General Mills (Patil & Bach, 2017).


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Conclusion
A marketing plan is a comprehensive outline of the business strategies of the company. The
report includes the marketing plan of the Nestle Australia. The company is leading company
having to operate in many international companies. The report shows the situational analysis,
consumer market, Segmentation, targeting, positioning, and marketing mix of the company. The
situational analysis of the company includes the external factors that might impact the working
and decision-making of the company. It is recommended to the company to grab the opportunity
for maximum revenue and growth.

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References
Clarke, A. E., Friese, C., & Washburn, R. (Eds.). (2015). Situational analysis in practice:
Mapping research with grounded theory (Vol. 1). Left Coast Press.
Economic Freedom. (2017). Australia. Viewed on 23rd January 2018.
https://www.heritage.org/index/country/australia
Haseeb. (2017). Pestle Analysis of Nestle. Viewed on 23rd January 2018.
http://marketingdawn.com/pestle-analysis-of-nestle/
Hollensen, S. (2015). Marketing management: A relationship approach. Pearson Education.
Keegan, W. J., & Green, M. C. (2015). Global marketing. Upper Saddle River, NJ: Pearson.
Nestle. (2017). About Us. Viewed on 23rd January 2018. https://www.nestle.com.au/aboutus
Nestle. (2017). Brands. Viewed on 23rd January 2018. https://www.nestle.com.au/brands
Njambi, E., Lewa, P., & Katuse, P. (2015). Porter’s Five Forces Influence on Competitive
Advantage in the Kenyan Beverage Industry: A Case of Large Multinationals.
Patil, D. D., & Bach, C. (2017). Marketing-Mix For Strategy Building. Marketing, 4(4).
PESTLE analysis. (2015). SWOT Analysis of Nestle, the popular food brand. Viewed on 23rd
January 2018. http://pestleanalysis.com/swot-analysis-nestle/
Rani, P. (2014). Factors influencing consumer behaviour. International journal of current
research and academic review, 2(9), 52-61.
Rothaermel, F. T. (2015). Strategic management. McGraw-Hill Education.