Brand Management of Nestle: A Comprehensive Analysis

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Brand Management
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Table of Contents
Introduction...................................................................................................................... 3
Task 1- Building and managing brand over time (LO1)....................................................4
Task 2- Brand portfolio and hierarchy management (LO2)..............................................7
Task 3- Brand extension and leverage (LO3)................................................................12
Task 4- Measuring and managing brand value (LO4)....................................................15
Conclusion..................................................................................................................... 17
Reference List................................................................................................................ 18
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Introduction
Brand management is a marketing strategy which plans and analyses on the
perseverance of a brand in a market. Building relationship with the targeted brand is the
sole criteria of a successful brand management. There are several tangible and
intangible elements associated to brand marketing like price, packaging and its looks.
The intangible elements associated with brand management consist of the experiences
and the relationship that the customers share regarding the brand.
The assignment will discuss about branding as a marketing tool, it will also discuss
about the stages of building a successful brand. The brand considered for this
assignment is Nestle. Nestle is a Swiss multinational company dealing with food and
drinks and is headquartered in Vevey (nestle.com, 2019). It is the largest food company
in the world, serving its products worldwide. Its products include baby food, coffee, dairy
products, and bottled water and so on. It has revenue of 91.43 billion with an employee
range of 308,000.
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Task 1- Building and managing brand over time (LO1)
Article- “Brand is Power”
Introduction
A brand is a particular product that is produced by the company under a specific name.
Brand equity describes the value of the brand. The brand value is determined by the
perception of the customers (Pappu and Christodoulides, 2017). For instance, if a brand
is highly regarded by the consumers, then it has affirmative brand equity.
Figure 1: Brand Development
(Source: bdc.ca, 2019)
A successful brand can be developed by following some stages. In the first stage, the
company should conduct market research to assess the awareness of the customers
concerning the brand. It would help the firm to evaluate the factors and characteristics
that the customers are expecting from the brand. In the second stage, the firm should
create a value proposition that should be different from the competitors’ commodities. In
the third stage, the firm should select a name of the brand that would influence the
customers’ purchasing decision. In the fourth stage, the firm should create an emotional
attachment with the customers through improving the brand effectiveness such as using
appealing colour and design for food products, using blue colour for water-based
products, green for vegetable-based and such themes. In the final stage, the
corporation should make continuous communication with the consumers through brand
modelling strategy or advertising the products (bdc.ca, 2019). However, the idea of
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establishing the brand can be done by targeting a specific group of customers such as
baby food particularly for babies and such.
The functions of the marketing department such as pricing, product development,
promotion, and creating channels of distribution help in creating a brand image by
enhancing the awareness of the brand (Haider et al., 2019). Through advertising, the
marketing section helps in communicating with the customers, thus attracting the
consumers in making purchases of the goods of the brand. The word-of-mouth created
by marketer helps in building brand equity.
Main body
Maggie, a brand of Nestle, has incorporated some strategies to strengthen brand
equity. It has created a strong tagline to have a strong bond with the customers. The
tagline such as “2 minutes noodles” has expressed the aspect of the product that is
convenience. It has also created an effective visual identity by proper selection of
packaging and has targeted customers based on the region by launching flavours of the
products that would be preferred by the native people such as “Masala Maggie”, “sweet
and sour”, and others to attract a variety of people. The brand has experimented by
extending the product range, such as by launching ketchup, pasta, noodles, and many
others (uxplanet.org, 2018). Through these ways, the company has promoted the
goods.
Figure 2: Maggie logo
(Source: uxplanet.org, 2018)
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In 2015, Maggie, a brand of Nestle has been removed from the market as it has been
found by Food Safety Regulators of India that the product has lead in a high amount
that is not permissible in food products (ndtv.com, 2015). The product was found as
having monosodium glutamate in high amount. However, the food regulator of the UK
found that the product has a permissible amount of lead (Agarwal, 2015).
Figure 3: Maggie banned in many countries of world
(Source: ndtv.com, 2015)
The company has therefore, overcome the crisis by advertising campaigns to generate
trust of the customers (news.com.au, 2015). Celebrities were used for advertisement
purpose so that the customers would be lured into buying the goods. The firm has also
taken the support of media for revitalising the brand by encouraging people to share
their memories of Maggie in social media (Carter, 2016). It has reinforced the brand by
introducing the brand again with effective advertisement tactics. The idea of recalling
the brand in the mind of the customers through encouraging them to share their stories
related with the product in media has helped the firm to recover the brand equity
(JOHARI, 2015).
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Figure 4: Marketing technique of Maggie for developing connection with
customers
(Source: Carter, 2016)
Conclusion
Branding is essential for the firm as it helps in getting from among the customers.
Through branding, the customers become loyal to the firm as well. It enhances brand
equity as including brand in the company would enhance the perception of the
consumers concerning the brand. Branding would increase the profit of the firm. It gives
confidence in including more brands in the organisation. In marketing, branding is vital
as it connects the customers with the company in an effective way (Wheeler, 2017).
Thus, it helps the company in making more sales of the commodities offered by the
brand. In this way, branding is essential for marketing products.
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Task 2- Brand portfolio and hierarchy management (LO2)
Introduction
This report focuses on the meaning of brand portfolio with reference to the Nestle. The
concept of brand equity will be considered. The brand hierarchy of Nestle will be
discussed providing a hierarchical chart. The concept of brand equity along with the
concept of maximisation of brand equity will be considered.
Brand Portfolio refers to the collection of the trademarks that a company applies to its
services and products. Nestle follows health, wellness, and nutrition strategy. It aims at
providing the healthiest choice and sees to the fact that it is delivered in a convenient
way. It follows flexibility concerning the success of its product portfolio (Laszlo and
Cescau, 2017).
Figure 5: Brand Portfolio of Nestle
(Source: Espinoza et al., 2018)
Organic growth investment- Nestle emphasises on capital expenditure, R&D, brand
support for improving its business. It allocates resources into those businesses, which
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has the potential to generate high profit. Foods like water, nestle health science,
nutrition, coffee are given the top priority concerning investment.
Innovating business models and products- Nestle emphasises on rapid innovation
and bringing more products into the market to meet the growing and changing demands
of its customers. Innovation also contributes in the increase of the profit margin.
Embracing digital opportunities- Digital opportunities has contributed to the growth of
this brand. Digital transformation mainly focuses on delivering personalised messages,
products and services to its customers. Through digital modernisation, it is trying to
increase its brand values. The e-commerce sale of nestle has grown over 7.4% in the
recent years.
Occasional improvement- Nestle has actively evolved towards a high profile business
with a great growth opportunity. In 2018, it strengthened its position in the coffee market
by acquiring the global license of starbucks. Noncore businesses are also focussed on
so that they can easily capture the market. This marketing strategy is done with much
discipline so that the company can grow smoothly with minimum disruption and
maximum profit.
Focus on increasing operational efficiency- In addition to the expansion of business
agenda, the company has been committed to increase its profit margin of 17.5% to
18.5% by 2020. It has successfully executed its plan of reducing the structural cost by
2.5 billion. The company primarily focuses on areas of administration, distribution and
manufacturing. It continues to strengthen its business by standardising and simplifying
its production process.
Environmental concern- The Company continues to focus on freeing resources that
provides fuel for further research and development. It has also aimed at developing its
products keeping in view the concerned environmental issues and aims at making the
packaging of its products environmental friendly. In this way, it tries to attract its clients.
Nestle being the core brand has a number of brands under it. This can be
hierarchically categorised. It can be divided into three main branches consisting of the
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Nescafe, Kitkat, Cerelac, Garber, Boost, Milo
Pepetamen, Nestle Resource, and Nutren junior
Purina
Nestle
Food and
beverage
Health care
Pet Care
food and beverages, health care and pet care. The food and beverages group consist of
the products such as coffee, dairy, chilled and frozen food, ice cream and so on. The
health care nutrition consists of Boost, Pepetamen, Nestle resource, and nutren junior.
This gives ample of opportunities to the customers to choose from the given products
based on its needs. It helps in the smooth and peaceful functioning of the company too
and the group division makes it more systematic for the record keeping purpose of the
company.
Figure 6: Hierarchical brand structure of Nestle
(Source: Created by the learner)
Brand equity is a marketing strategy describing the values of having a well-known
brand name. It is the capacity of the brand to attract its customer in reference to a brand
name. There are four components of brand equity.
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Figure 7: Brand Equity
(Source: Sasmita and Mohd, 2015)
Brand Awareness- Nestle is a globally recognised food company having its services
throughout the world. It has a portfolio of 8500 products. Nestle spends a huge sum of
money on its branding and marketing. The slogan of “good food and good life” has
made the brand well known worldwide. It organises several conferences and events
have made the customers much aware about the company.
Brand Association- Nestle has a well-developed communication channel throughout
the worldwide market. It has well developed marketing strategy, which acts as an added
benefit for the company. It tries to communicate to its customers through direct selling,
advertisements and the schemes that it develops for selling a product.
Brand Loyalty- The Company has been operating in the market for about 153 years
thus loyalty towards its customers has been its key concern. The loyalty and belief of
the customers towards the products have increased over the years. This has saved
Nestle during its crisis period.
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Perceived Quality- Improving the product quality has been a major concern for the
company and it spends huge sum of money on R&D to gain the loyalty of the
customers. The superior product quality attracts customers towards this brand because
of which it does not have any strong opponent in the market. It focuses on developing
products for each age group, keeping in mind the concerned country.
Conclusion
This report has been prepared considering the concept of portfolio and its basis of
functioning of Nestle brand. The concept of brand equity has been discussed
concerning the concerned company. Details for the maximisation of brand equity have
been discussed. The hierarchical structure of the company has been discussed
considering its brands.
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