Marketing Strategies Report: Product, Channels, and Pricing for Nestle

This report provides a comprehensive analysis of Nestle's marketing strategies, focusing on the launch of their organic chocolate product. It begins with an overview of product strategy, emphasizing the importance of market research, defining the target market, and establishing a unique product identity. The report then delves into integrated marketing channels and distribution systems, examining how Nestle utilizes a hybrid approach incorporating both traditional and digital marketing techniques to reach consumers. It highlights the use of social media, advertising, and various distribution channels, including direct selling and intermediaries. Finally, the report discusses pricing strategies, comparing competitive, dynamic, premium, and value-based pricing models, with a recommendation for Nestle to adopt a value-based pricing strategy. The report emphasizes the need for efficient planning and strategic focus to achieve marketing goals and maximize profitability.

Running head: Marketing
Marketing strategies
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Table of Contents
Part 1..........................................................................................................................................3
Product strategy......................................................................................................................3
Reference................................................................................................................................4
Part 2..........................................................................................................................................6
Integrated marketing channels and distribution systems.......................................................6
Reference................................................................................................................................7
Part 3..........................................................................................................................................9
Pricing strategy.......................................................................................................................9
Reference..............................................................................................................................10

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Part 1
Product strategy
Product strategy is an essential part of a successful marketing strategy that helps the
organization in achieving its marketing goals, thus collecting higher profit for it. This strategy
provide a blueprint to the organization for establishing a sustainable business in the market.
As Nestle is expanding its products and has decided to produce organic chocolates for its
customers; therefore these strategies will help to analyse the market condition and provide a
clear view of acceptance of this product in the market. Product strategy explains the ultimate
mission and vision of a product. It provides the main intention behind launching that product.
Setting an efficient product strategy provides a clear direction of the product efforts (Stark
2015). Basic elements related to a product such as its design, marketing mix are explained by
the product strategy. In addition, it is beneficial for deciding the market penetration and target
market for the company (Bocken et al 2016). Below, there is a list of some common product
strategies adopted by the organizations in recent days.
1. Adoption lifecycle
2. Backward invention
3. Brand architecture
4. Brand recognition
5. Market research
Among all the above discussed product strategies, nestle should consider the market research
strategy. It focuses on gathering information about the current market, competitors’
marketing strategies and needs and expectations of the customer. All these data will help the
organization to develop a better product and meet the marketing needs of the organization.

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Adoption of efficient production strategy is not only the single parameter, rather the
organization need to have efficient planning for implementing the strategies.
Following are some important elements of a successful product strategy.
1. Defining the target market/ selecting the set of customer
2. Deciding unique feature or identity of the product for gathering competitive
advantages.
3. Creating a value proposition of the product and explaining what benefits the customer
are going to get from the product (Chen et al 2017).
4. Making pricing strategies of the product and deciding the distribution channel for the
product.
Nestle need to focus on the above factors for creating a successful brand positioning of
the product. No doubt that the discussed brand has already established a noticeable position
in the market; yet, the decision of introducing organic chocolate to the market need to be
strategize efficiently (Shi, Liu and Petruzzi 2013). The selected marketing niche of focusing
on the target market will help nestle to channel all the marketing efforts and will also become
beneficial in grabbing more customer attention. The organic chocolates that are going to be a
market leader due to the previous existing brand reputation of the selected organization. The
high margin business provided by the product strategy will help the organization to create a
strong relationship with the customers.
Reference
Bocken, N.M., De Pauw, I., Bakker, C. and van der Grinten, B., 2016. Product design and
business model strategies for a circular economy. Journal of Industrial and Production
Engineering, 33(5), pp.308-320.

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Chen, T., Tribbitt, M.A., Yang, Y. and Li, X., 2017. Does rivals' innovation matter? A
competitive dynamics perspective on firms' product strategy. Journal of Business Research,
76, pp.1-7.
Shi, H., Liu, Y. and Petruzzi, N.C., 2013. Consumer heterogeneity, product quality, and
distribution channels. Management Science, 59(5), pp.1162-1176.
Stark, J., 2015. Product lifecycle management. In Product lifecycle management (Volume 1)
(pp. 1-29). Springer, Cham.

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Part 2
Integrated marketing channels and distribution systems
Spreading the product awareness in the market and bridging the gap between the
product and customers, it is essential for the organization to make successful marketing
strategies. Integrated marketing channels are the strategic plans that helps the business to
make its product reach to its customers (Lu and Liu 2013). Implementing efficient multi-
channel marketing plans leads towards strategic focus and also helps the organization to have
lifetime value and overall profitability. In order to attract its customer and acknowledge them
about the new product, Nestle uses a hybrid marketing system or a multi-channel distribution
system. It will enhance the market coverage, lower its channel cost and customized its
selling. It uses both the traditional and digital marketing strategies (Sa Vinhas and Heide
2014).
By integrating the business with the social media channels, it provides product related
information to the customers in several social media platforms. Apart from using social
media marketing strategies, the organization can also focus towards posting advertisements
on TV and newspapers.in addition to that, integrating the marketing strategies with printing
the advertisement of the newly launched product in the billboards and flyers can also grab
customer attention. Health consciousness among the customers are increasing now a days and
in such a scenario, Nestlé’s decision of launching organic chocolate will definitely become a
profitable business. Hence, conducting campaigns for acknowledging customers about the
product will also become a reason of increasing sales.
There exist four type of distribution channels by which an organization can sell its
products. These are as follows;

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Direct selling: Performing marketing or selling activities away from any fixed retail store
directly to the customers is explained by direct selling. Where peddling explains the oldest
direct selling method; the modern type of direct selling describes selling carried out by one to
one demonstration, party plan and many such.
Selling via intermediate: It is the marketing channel in which several intermediaries, for
example, retailers and wholesalers are utilized for making a product available at the
consumer. A typical intermediate distribution channel mainly includes manufacturer or
Producer, agent, wholesaler, retailer and consumer and are responsible for creating a large
supply chain for the organization.
Dual distribution: Dual distribution explains a large variety of different marketing
arrangements that is used by the wholesaler and manufacturers in order to reach out to the
end users. Under this type of distribution channel, companies have authority of directly
selling the products to the end users or else selling their products to any other companies for
its reselling (Batzer 2019). Basically, the company using this type of distribution system, uses
multiple channels for attracting the same target market and customers.
Among the above discussed distribution channels, Nestle selects selling their product
via intermediates. Selection of the marketing channels put direct impact on the profitability,
brand value along with the entire scale of operation of the organization. Before selecting the
appropriate intermediate, distribution channel and marketing practices, the organization need
to put focus on its target market and their exact needs and expectations.
Reference
Batzer, E., 2019. Marketing strategies and distribution channels for foreign companies in
Japan. Routledge.

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Lu, Q. and Liu, N., 2013. Pricing games of mixed conventional and e-commerce distribution
channels. Computers & Industrial Engineering, 64(1), pp.122-132.
Sa Vinhas, A. and Heide, J.B., 2014. Forms of competition and outcomes in dual distribution
channels: The distributor’s perspective. Marketing Science, 34(1), pp.160-175.

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Part 3
Pricing strategy
Pricing strategy can be identified by method or model, which mainly used for
establishing most suitable price for a particular product or service (Li, Xu and Li 2013).
Pricing strategies also helps the organization to select individual prices for every product that
will maximize the shareholder value and profit. Companies need to form their pricing
strategy by analysing the market demand, consumer affordability and pricing policies adopted
by their competitors. Some common type of pricing strategy are as follows;
Competitive pricing policies
It is also identified as competitor or competition based pricing policy. It emphasizes
on the ongoing market rate for an organization’s product. Here, less focus is given to the cost
and customer demand. In such case, the competitors’ pricing policies are kept as benchmark
(Li et al. 2016). Mainly, the businesses operating in a highly saturated stage, use this pricing
strategy (as a little difference in the price can act as a deciding factor among the consumers).
Dynamic pricing
Dynamic pricing is alternatively identified by the name demand pricing or surge
pricing or time-based pricing. Moreover, this pricing strategy is known as flexible among all
the pricing strategy as prices decided for each product or service is not fixed here; rather,
fluctuate depending on the customer demand and market condition. Mainly, the utility
companies, hotels, airlines and many such companies use this type of pricing policies.
Premium pricing
Premium pricing is also identified by prestige pricing strategy or luxury pricing, and
under this strategy, the companies decide higher price for their products. The main reason

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behind this is to present their brand image as a high value, premium and luxurious product
(Ingenbleek and Van der Lans 2013). This pricing strategy emphasizes on the perceived value
of a particular product other than the exact value and the production cost. It is identified as a
direct function of the brand perception and brand awareness.
Value based pricing
Value-based pricing policy happens when firms decides price of their products or
services focusing on what price the customers are willing to pay. Based on the customer data
and interest, pricing of the product is decided and other factors such as, competitors’ price,
brand luxury are given minimal focus. In some cases it is also called the low pricing policy,
as based on the customer affordability companies decide minimal price for their product
(Liozu and Hinterhuber 2013). Furthermore, this type of pricing is applied for attracting more
customer and gathering more customer loyalty.
Nestle is a well-recognized brand and has created impactful brand identity and
reputation in the market. However, as it is launching a new product, therefore it can be
recommended that rather than using the competitive pricing policies, a value-based pricing
strategy will be more beneficial and can gather more profit.
Reference
Ingenbleek, P.T. and Van der Lans, I.A., 2013. Relating price strategies and price-setting
practices. European Journal of Marketing, 47(1/2), pp.27-48.
Li, B., Zhu, M., Jiang, Y. and Li, Z., 2016. Pricing policies of a competitive dual-channel
green supply chain. Journal of Cleaner Production, 112, pp.2029-2042.

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Li, Y., Xu, L. and Li, D., 2013. Examining relationships between the return policy, product
quality, and pricing strategy in online direct selling. International Journal of Production
Economics, 144(2), pp.451-460.
Liozu, S.M. and Hinterhuber, A., 2013. Pricing orientation, pricing capabilities, and firm
performance. Management Decision, 51(3), pp.594-614.

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