Brand Management of Nestle: A Comprehensive Analysis

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BRAND MANAGEMENT
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Table of Contents
Introduction...................................................................................................................... 3
LO1.................................................................................................................................. 4
LO2.................................................................................................................................. 9
LO3................................................................................................................................ 13
LO4................................................................................................................................ 15
Conclusion..................................................................................................................... 19
Reference Lists.............................................................................................................. 20
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Introduction
Brand Management known as the type of analysis in which a consumer recognizes a
branded product from the market. The main features in which a brand highlighted are
quality of the product, looks of the product, price and its packaging style. Its main goal is
to make better connection with the customers. Here, the selected company is
“NESTLE”. The report aims about the chosen brand management, its value and
importance. It will elaborate the successful strategies associated with the brand. It will
discuss about the analysis of how brands are manage in a portfolio. The report explains
about how the brand is managed in a cooperative way.
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LO1
Demonstrate an understanding of how a brand is built and managed over time
Introduction
A brand is a combination of realization in the mind of customer. The brand can be
defines as a name, term, sign, design of a particular product which differentiates a
product from other company (Heding et al., 2015). In the United Kingdom, Nestle has
robust corporation having several sub-brands like Nescafe, Kit Kat, Maggi, Espresso
and many others.
Figure 1: Different Brands of Nestle
(Source: Nestle.co.uk, 2019)
Nestle is collaborated with coffee, chocolates, cereals and many more products. Brand
value defines a
Figure 2: Nestle tagline
(Source: Nestle.co.uk, 2019)
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P1 Explain the importance of branding as a marketing tool and why and how it
has emerged in business practice
Branding is an approach of identifying any business. It is all about how the consumers
experiences and perceive a business and its product. A robust brand is not only a logo,
it is more about marketing products, styles of customer services, uniform staffs,
advertising and business staffs. Hence, it represents the quality, strengths and
personality of a business.
There are six major steps related with the building of a brand. Nestle company’s first
goal is to target customers to whom it will serve and sell goods. The steps are as
follows:
 Step 1: The company analyses the issues face by customers and it attempts to
meet their needs and preferences
 Step 2: The company focus on the goals in which management, promoters and
essential members will examine and works on those goals along with both long-
term and short-term targets
 Step 3: The company focus on the market research in which company analyses
the market condition, competition in the market and realization of consumers
related to the brand
 Step 4: The company establish a concept regarding the value of the required
brand and convey the profits of the brand (Séraphin et al., 2016)
 Step 5: The company follows the guidelines of a brand that involves important
factors like elements visualizing, brand strategy and schemes of the particular
brand. The final step of brand building is to develop the brand structure such as
its logo, colour patches, fonts, mascot, and tagline for the brand. These steps are
usually followed to develop in context to marketing guarantee components and
its promotion
Marketing department has an important role to make brand awareness and the image of
the organisation. The department researches about the market condition along with
customer’s feedback. Marketing tells about the effectiveness and profits of the brand to
the customers by examining their tastes and perception. It represents the visibility of a
brand through channel marketing communication. Marketing programs planned by the
department are concerned to product value, price, position, services and its channel of
distribution. In order to upgrade brand value the company goes through several
advertisements and different promotional methods.
P2 Analyse the key components of a successful brand strategy for building and
managing brand equity
Brand equity and its different perspectives
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Brand equity defined as the value received by a business unit’s products, when
comparison with other brand’s product is done.
There are five key components of brand equity. They are as follows:
 Awareness
It means the existence of particular brand is known to the customer
 Brand Association
It includes memories of particular product of a brand, which a customer has. This
includes physical appearance, price, product category and others.
 Perceived quality
It is the perception of customers regarding the entire specifications and quality of
a brand.
 Brand Loyalty
When a customer buys a particular brand from a set of brands, brand loyalty
arises.
 Other proprietary assets of a brand
This includes patents and trademarks which prevents any unethical activity in an
organisation
Nestle uses various strategies to make a robust expansion of brand, brand justice and
reinvigorate the brand. Using Aaker Brand equity model, the Nestle company follows
several approaches and planning for making its brand equity. According to the model,
there are five classifications of assets, which add value to a brand. The classification
includes brand association, brand awareness, brand loyalty, perception quality and
brand identity. Here, figure related to the model depicted below:
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Figure 3: Aaker Brand equity model
(Source: de Oliveira et al., 2015)
There are total four perspective of this model. First is the brand that includes attributes,
scopes, quality, value and scope of a product. Second is the perspective as a person
that includes personality and relationship of customer brands. Third factor is the
perspective as an organisation, which constitute of company attributes. The fourth
perspective is the brand as a symbol, which contains brand architecture, visual
imaginary and analogous symbols (Danaei et al., 2016). Following this model, Nestle
becomes combative in several low participative markets like confectionary, cereals,
coffee, drinks and others. Nestle can increase, expand and strengthen its brand through
these strategies. The first strategy is to take care about the quality of the goods. The
quality of a product can increase the brand value as it the most important factor about a
product. First thing, which customers realize after using a product is its quality.
Perceiving a product without examining its quality may lead to the collapse of a brand.
A suitable to strengthen the brand is to meet the particular demands and preferences of
customers. It can be achievable by keeping a track on the competition around the
market and industry trends. In the confectionery industry, there are many competitors
like Nestle. Nestle have to perform better as per expectation of consumers to extend the
brand. Maintaining a consistency in branding is very important for a company.
Maintaining a good communication with customers can be beneficial for the company.
Customer’s feedback is very profitable for a company in which by considering those
feedbacks it can upgrade and rebuild the brand. A competitor of Nestle, named
Mondelez, uses Corporate Social Responsibility (CSR) approach and cooperative work
to upgrade its brand value in share market. This means the company follows the
customer’s feedbacks that mainly consist of quality factors regarding a product. The
customers prefer quality of a product in an affordable price. Kraft foods inc follows
content marketing strategy to make its brand value stronger. Nestle can follow this
strategies to make profit in its business.
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Conclusion
A robust brand helps in profiting a business of an organisation. A brand indicates a
definite value to product. Most of the customers prefer branded product because they
love to use branded thing rather than ordinary quality products. When customers buy
branded products from a branded company its marketing value increases as well as the
company’s demand. The profit also increases by repetitive marketing by customers,
providing a competitive edge to the marketing business. Customers always believe that
a branded company will not compromise in the quality of its products and thus the
company gains its reputation as well. During extensive branding, a company’s revenue
and market share enhances because of high consumer preferences. In the same way,
Nestle can use its brand power to enter in new areas to attain opportunities by serving
its products. This concludes that branding is an essential tool for an organisation for
help in marketing.
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LO2
Analyse how brands are organised in portfolios; how brand hierarchies are built
and managed.
P3 Analyse different strategies of portfolio management, brand hierarchy and
brand equity management
Introduction
Brand portfolio is defined as the accumulation and compilation of different brand and
brand lines of a firm to serve the needs of different market section. The task will
consider Nestlé’s portfolio strategies and will discuss in details its position in global
market. In order to manage Nestlé’s brand equity, different policies will be discussed
here.
1. Analyse the organisation’s brand portfolio strategy
The coordinated and systematic approach of managing and constructing different types
of portfolios brand is known as Brand portfolio strategy. Brand portfolio strategy consists
of range and role of different brands and common relationship between different brands,
as the two main elements. The house blends, brands house, and branded house are
the main prototype of brand portfolio (Sevel et al., 2018).
Branded house consists of various categories of product under single brand. It is mainly
concerned with development of brand. The accumulation of different and independent
brands consists of brands house. The model, which gives importance on progress of
each sub brands, is known as house blend. Nestle has unique way of targeting
customers, by implementing house of brands model. In this way nestle targeted each
category and group of customers. Nestle has freedom and power to extend its products
and brands in various market segments, thus becoming one of the leading organization.
Nestle always defines the importance of its sub brands, as constructing brand portfolio.
They always measure the outcomes and performance of its own sub brands by focusing
on customer’s requirement and brand development. Nestle has a habit of promoting
well-built sub brands, in order to introduce other products in the market. The
classification of different categories of products and sub brands are simplified by brand
architecture. In order to make it simpler nestle uses dissimilar naming styles, link
system and visual character. In this way customer, offerings became simpler.
2. Provide an illustration of the hierarchy management of brands within
organisations portfolio
The Hierarchy of brands determines the varieties and classification of products in
Nestle. Nestle has nearly 2000 brands in its portfolio, which are arranged according to
geographical location (nestle.co.uk, 2019). Nestle has implemented a hierarchical
system of linking minimum two brands with every product. Nestle has divided its
products according to geographical location. They are internal, regional, and local.
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Customer demand is also important in determining the roles and functions of different
brands. Nestle basically depends upon brands like Buitoni, Nescafe, Nestle and many
others to carry out its business and promoting activities. Various product brands are
also present in Nestle like Nestle Pure life, Vittel, Lion, Kit Kat and others (nestle.co.uk,
2019). Its regional brand consists of some products like Aquarel, Nuts bar, Contrex and
Herta cold meats. The geographical location of a country determines the selling of local
brands.
Figure 4: Hierarchy of brands in Nestle
(Source: Created by the learner)
The logo and symbol of brands are different from each other in Nestle, in order to make
proper classification amongst them. The main reason behind this is the customer
expectation. Consumer’s expectation of coffee products will differ from cold meats. The
idea of creating different symbols and logo is for generating dissimilar view regarding
products.
3. Analyse strategies used for managing the equity of the brands within the
organisations portfolio
The equity of brands could be managed by applying different strategies. This is
thoroughly explained by different models.
Brand Asset Valuator
This model depicts different brand management tools of strategy along with the
comparison of different equity value for the extension of brand process. Brand asset
valuator includes energised segregation, esteem, relevance, and knowledge as the four
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NestleCorporatebrandNestlé,Nescafé,Nestea,Maggi,BuitoniandPurina.StrategicInternationalbrandKitKat,Lion,FriskiesandthemineralwatersPerrier,SanPellegrino,VittelandNestléPureLifeStrategicRegionalbrandAquarelandContrex,theNutsbar,andHertacoldmeatsLocalbrandsCailler,Butterfinger,Rossiya,Orion,CajaRoja,SaoLuiz and Star.

base of brand equity. The contribution of a definite brand for the business unit can be
properly explained by fiscal analysis (Roll, 2016).
Brandz
The objectives of brandz are advantage, bonding, existence, performance and
relevance. Advantages determines in which way the particular brand is superior than
other brands. Bonding explains the capability of sustaining proper and fruitful relations
with customers, which is unbreakable. Performance is another criteria of delivering right
and accurate products to customers. If the brand having advantages of delivering
unique and different products, then it is known as relevance (Laforet, 2017). This
objective have to be maintained thoroughly in order to retain brand name.
Brand Resonance
Building a particular brand requires certain process of brand resonance. It clearly
identifies particular needs of customers related to the brand. The opinion and decision
of customers regarding brand is also explained. Brandz use feedback and response of
consumers to create a strong and vulnerable relationship with them (Badrinarayanan et
al., 2016).
Another important step taken by Nestle is building brand according to the needs and
demands of customers. The successful use of this model could create unique idea
regarding each product category. The brand equity of Nestle is managed by the
implementation of certain strategies. They are.
Building distinct product
Implementing and launching new and distinct products will make Nestle different from
its competitors. This will make them more valuable in the market environment. It has
been observed that customers will lean towards its product, with the implementation of
distinct brands and products.
Valuing people
Valuing the needs and demands of people is another major objective of Nestle. Nestle
is offering wide varieties of products to satisfy the customer requirements. Nestle do not
even focused on profits, but follow the needs of customers. It perform test on customers
to know the performance, in order to find its brand equity.
Communication strategy
Communication strategy is important to build a good customer base. Excellent
communication is also essential to build proper brand equity. Communication includes
both conventional and online ways to communicate with customers regarding promotion
of particular brand or product (Keller and Brexendorf, 2016). Communication develops a
specific identity of the product, in front of customers.
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Conclusion
As per different ranges of product, Nestle brands its own product. The strategies
mentioned earlier used by Nestle to promote and brand its own products. To develop
strategies, nestle focussed on brand resonance model.
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