Comprehensive Marketing Report: Nestle Sugar-Free KitKat in Singapore

Desklib provides past papers and solved assignments. This report analyzes Nestle's marketing strategy for its sugar-free KitKat in Singapore.

ASSIGNMENT

Table of Contents
1.0 COMPANY INTRODUCTION................................................................................................1
2.0. MARKET ANALYSIS.............................................................................................................2
PESTLE ANALYSIS..................................................................................................................2
PORTER’S 5 FORCE ANALYSIS.............................................................................................3
3.0. STP STRATEGY......................................................................................................................5
SEGMENTATION......................................................................................................................5
TARGETING..............................................................................................................................6
POSITIONING............................................................................................................................6
4.0. MARKETING STRATEGY....................................................................................................8
5.0. POTENTIAL IMPLEMENTATION ISSUES.......................................................................12
6.0 CONCLUSION........................................................................................................................14
7.0 REFERENCES........................................................................................................................15
1

1.0 COMPANY INTRODUCTION
Health is a state of complete physical, mental and social well-being and not merely the absence
of disease. Nestle is a nutrition, health and wellness company, which manufactures and supply
prepared dishes, milk-based products, pharmaceuticals and ophthalmic goods, baby foods. In
Singapore, there is a rapid increase in the diabetic patient for the citizen's age 60 and below.
Nestle introduced a new product that is Sugar-free kit Kat chocolate wafer bar in Singapore to
allow health-conscious customers as well as the diabetic patient to enjoy the joy that chocolate
brings. The study will help the learners to know about the benefits, cost and overall knowledge
of the strategies.
2

2.0. MARKET ANALYSIS
Market analysis involves the evaluation of the situation and trends in the market. The aim of
market analysis is to determine the area where the marketing efforts are needed and to
implement the plans accordingly. Nestle is a food processing industry founded in 1866 by Henri
Nestles. It has 333,000 employees all over the world. Nestle focus on the analysis of pricing,
product, distribution, promotion strategies, competitor’s strategies for growth of the
organization. Nestle reduced the sugar content by 10% and introduced sugar-free Kit Kat
chocolate wafer bar for the citizens having diabetes to enjoy the joy of chocolate. Nestle
focused on the customers of all ages from infancy to old age, from nutrition to pleasure and
products of the highest quality (Joll et al., 2018).
PESTLE ANALYSIS
Pestle analysis is a tool used by the organization to track the environment they are working in
for launching new product and growth of the organization. Pestle stands for Political, Economic,
Social, Technological, Legal and Environmental. The pestle analysis of entire business
environment of Nestle will help in improving the operation on right time, right place and with
the right direction and also provides opportunities for the future business growth along with
profit (Policy, 2016).
Political factor- Nestle serves the products in many countries. The rules and regulation of
government are different in different regions. The organization needs to focus on these political
rules like the taxation, import-export excise duties, government permission and also to
introduce hygiene products allowed by the regulated bodies. Nestle needs to consider and
recognize all the related risk that could be involved like the sugar-free kit Kat chocolate will be
beneficial for the customers or not keeping in mind the effects of chocolate oh the health of the
customers (Alava, 2018).
Economic factor- Different countries have a different economic situation such that Nestle has
to set different economic policies for the target. The price of the product is an important aspect
of economic policies. The organization needs to focus on the pricing of the product while
3

strategizing the economic policies according to the inflation rate and the buying power of the
segment (Molnár and Lendvay, 2016).
Social factor- Social factor includes the culture, lifestyle, norms and values. The organization
needs to focus on the changing needs of the customers. The company has to understand the
concept that consumers changing attitude has immense importance. The organization needs to
focus on the willing of the customers and strategies to satisfy them. As the organization focused
on diabetic patients and introduced a sugar-free kit Kat bar which is beneficial for all the
customers (Zhang, 2019).
Technological factor- Nestle needs to use new technologies in several business operations like
in maintaining the database, use of social media for direct interaction between consumer and
the company. As Nestle introduced the sugar-free kit Kat, so the organization needs to do the
promotion of the chocolate as well as needs to educate the customers about the benefits of the
product (Brabencová et al., 2017).
Legal factor- Legal factor includes the legal environment of the organization and its influence
on the operation to meet the demand. Nestle needs to follow the health and safety laws for the
employees and also to produce hygiene product for the customers (Zahari and Romli, 2018).
Environmental Factor- Nestle needs to follow the rules and regulation to produce the healthy
food with environmental friendly operations like the recycling process and the issue pertaining
to the packing (Brabencová et al., 2017).
PORTER’S 5 FORCE ANALYSIS
Porter’s five force analysis is a tool used to analyse the parameters of the organization and to
develop business strategies. Nestle needs to an emphasis on the factors for developing business
strategies (Morden, 2016).
The threat of new entrants- Nestle is a strong name in the food industry and so it became a big
challenge for the new entrants to beat the organization. Nestle needs to focus on the position
of the organization in the industry and also on the new entrants that are trying to give
competition to the organization for gaining higher position (Gans and Ryall, 2017).
4

The threat of substitute goods- Every kind of product has a substitute in the market which
leads it to the height of competition. Nestle has to innovate its products continue to stay in the
market and needs to work efficiently for removing the threats of substitutes (Morden, 2016).
Bargaining power of the suppliers- Suppliers are considered as the strength of the industry.
Nestle has strong buying power and due to that, it has strong business relationships with the
suppliers globally (Gans and Ryall, 2017).
Bargaining power of the customers- The bargaining power of the customer is an important
factor in terms of the company's performance. Nestle has to an emphasis on the needs of the
customers to better satisfy them. The organization also needs to focus on health and wellness
while manufacturing new products (Morden, 2016).
Competitive rivalry within the industry- Competition in positive aspect brings success but in a
negative way destroy the industry. Nestle has a strong position in the food industry but has
some huge competitors like; Kraft food that is trying to gain the position. Nestle needs to focus
on these industries for staying in the top position (Gans and Ryall, 2017).
Nestle is one of the largest food companies in the world situated in Switzerland and has
branches in about 189 countries. Nestle has a great portfolio of products and has many
competitors across the food industries. The companies include Mondelezis which is a foremost
snack company of Illinois. Mars is also considered as a top nestle competitor located in the
United States. Apart from that Kraft Foods, Danone, Hershey’s, Heinz, Unilever, Kellogg is some
huge competitors of nestling (Bhasin, 2018).
5

3.0. STP STRATEGY
STP strategy refers to the segmentation, targeting and positioning strategies of the
organization. Nestle is the world's biggest food and beverages company. The main motto of
nestle is good food good life. The main vision of nestle is to make a good quality product to
make consumers health and happy. In accordance with that Nestle prepared a sugar-free kit Kat
chocolate wafer bar for the customers having diabetes issues. The company needs to focus on
STP strategies for the development of the organization (Ishak, 2018).
SEGMENTATION
Segmentation is a process of targeting a group of people having a similar intention towards any
particular brand. The segmentation is categorised on the basis of Demographic, Geographic,
Psychographic, and behaviour of the customers. Nestle needs to focus on the factors for the
development of the business (Craft and Hassan, 2015).
Demographic-In Demographic strategy the segmentation is based on the basis of age, gender,
income and education. Nestle never offers the same products for all age group for example; it
serves chocolate for children and coffee for adults and also introduced sugar-free kit Kat for a
diabetic patient. The organization produces the product in small quantity so that anyone can
easily buy it with money saving (Craft and Hassan, 2015).
Geographic- The organization needs to consider the weather, region and the geographic
conditions while introducing the business. Singapore nestle company needs to segment the
geographic weather warm, cold or hot before initiating the business (Craft and Hassan, 2015).
Psychographic- Nestle needs to manufacture products based on the lifestyle and personality of
the customers. For example; Kit Kat is for the customers who really want to taste the real
chocolate and the Nescafe 3 in 1 for the people who don’t have time to eat chocolate (Craft and
Hassan, 2015).
6

Behaviour- The behavioural strategy is based on the knowledge, awareness and attitude of the
customers. Nestle needs to educate the customers about the sugar-free kit Kat for gaining
profit in the business (Craft and Hassan, 2015).
TARGETING
Targeting is a process in which organizations select a particular target and do efforts to achieve
the target. In targeting the organization analyse the market place, the strength of the company
and the competitors and do efforts in achieving the target. In this strategy, the organization try
the serve the customers whose needs and wants are similar to the organization like in the case
of Nestle; the company targeted the customer who wants to eat chocolate but due to the
diabetic issue they are unable to take chocolate. So, Nestle targeted the diabetic patient by
making sugar-free kit Kat chocolate and now they need to focus on the strategy through which
they achieve the target. Fulfilling the needs of the customer having the same area of interest is
profitable for the customer as well as for the organization. If the customer gets what they want,
will increase the faith towards the organization and the organization gain profit from it
(Chernev, 2018).
For targeting the Nestle organization has to use differentiated marketing in which different
products are provided to different customers on the basis of age, gender, occupation, climate
etc. Also, the organization has to use concentrated marketing through which the organizations
can the strong market value by having good knowledge of their customers. As Nestle has the
knowledge of the customers having diabetic problems, so the company has to make better
chocolate which is sugar-free and have no side effect on the customers (Chernev, 2018).
POSITIONING
Positioning is the process of identifying the value of the organization in the market as well as in
the customer’s eye. By knowing the position in the market the organization can easily set the
goals for gaining a better position in the market as well as in the customer's eye. Nestle needs
to position the organization as well as the new chocolate in the market by using proper tactics.
The company needs to build trust in the customer’s eyes as well as in the market by positioning
the organization. This can be achieved by knowing the market responsibilities.
7

Product Differentiation- Product differentiation is a process of making the product different
from other brands and can be achieved by enhancing the quality of the product as well as by
fulfilling the willing of the customers. Nestle needs to enhance the quality of the sugar-free kit
Kat chocolate so that the chocolate has no side-effects on customer’s health which help in
gaining the trust of the customers.
Channel Differentiation- Channel differentiation is a process of serving the customer by
different modes like, selling of product by the experienced salesman and safe transportation
through which the product easily reaches to the customers. Nestle needs to sell the product
with the help of an experienced salesman which educate the customer about the product and
the benefits of the product. The company also needs to provide better transportation facilities
through which the product is easily available to the customers and that encourages the
customer to buy the same product next time which is beneficial for the organization.
Image Differentiation- Image Differentiation is a process of making the organization different
from others by making a logo of the company. Nestle needs to focus on the logo of the
company which make the product different from other products as well as from the
competitors and help the customers to easily identify the product.
Service Differentiation- Service differentiation is a process of providing services to customers
like 24/7 helpline centres through which the customers can easily communicate with the
company for any queries. Nestle needs to focus on the online services that help customers in
communicating with the company.
8

4.0. MARKETING STRATEGY
To achieve the market objectives the organization needs to follow the Market strategy. Market
strategy is a tool used by the organization for reaching the people and turning them into the
customer of the product. Marketing strategy is a market plan having goals and objectives and
proper planning to achieve the goals. Nestle has to make a proper market strategy for achieving
the goal like turning the people into customers, gaining the faith of the customers, high position
in the market and the popularity of the sugar-free kit Kat chocolate wafer bar. The goals can be
achieved if the company has proper strategy and tactics. The marketing strategy includes 4 p’s
as a key to success and the company needs to focus on the key factors.
PRODUCT
Nestle is one of the largest food companies across the world and having more than 8000 brands
with a wide range of products in the market that help the organization in gaining position in the
market. Nestle primarily focuses on the main products and tried to increase the variety of the
product as well as the manufacturing keeping in mind the quality of the product.
 Dairy products- Dairy products are the product prepared by the milk like Nestle milk,
Nestle slim and nestle every day.
 Chocolates- Chocolate is one of the most important segments of Nestle. It covers
popular products such as kit Kat, munch, éclairs, milky bar etc. and now introducing the
sugar-free kit Kat chocolate.
 Beverages- Nescafé is the biggest coffee brand in the world which is owned by the
Nestle.
 Ready to Cook foods- Nestle has introduced many ready to cook food that made the
cooking convenient for the customers like Maggi which is world biggest brand on its
own and have different products like Maggi masala, Maggi pasta etc.
PRICE
9

Price of the product depends on the quality of the product. If the quality of the product is good
and is beneficial for the health, then the customer will buy the product even though the price of
the product is a little bit high then another brand. The products price of Nestle is higher in
comparison to other brands because of the quality benefits. Nestle needs to provide the
products in varied sizes along with variation in cost like Maggi that is available in all sizes
starting from 5 Rupees. Different varied attracts customers to buy the product. Nestle needs to
focus on the quality of the sugar-free kit Kat chocolate wafer bar so that the customer buy the
chocolate due to the quality factor as the pricing strategy of the marketing mix depend upon
the competitor, product quality and the geographic being served. The pricing strategies are of
two types-
 Competitive pricing- Competitive pricing is the price of the product which is the same
for all the brands. Majority of the products offered by Nestle are provided at a
competitive price like Nestle Maggi, Nestle Kit Kat.
 Skimming pricing- Skimming price is the price of the product which is higher than the
competitor’s products price. These products are targeted towards the customers who
are health conscious. For example nestle A+Slim, Nestle A+Toned, Nescafe coffee.
PROMOTION
The organization needs to have some unique marketing idea to branding of the product and the
ideas are implemented through the advertising or direct interaction with the customers. Nestle
has to make an effective promotion strategy for the sugar-free kit Kat chocolate. The company
needs to interact with more and more customer for the promotion of the product with the help
of media like TV, hoardings, online adds, prints etc. More the company focuses on the
promotion of the product more they get the benefits of it, as interaction with the people make
aware them about the benefits and quality of the product which help the company to make
position in the market.
PLACE
10

The place is defined as where the product is manufactured or seen. 90 % of the sales and
revenues for Nestle come from European countries. Bulk products are manufactured in the
company and are distributed to the warehouse where the products are kept for further
distribution. From the warehouse, the products are distributed to the distributors and retailers.
The consumer buys the products through retailers. Nestle needs to follow the strategy and also
have to choose a proper location for the business. Nestle is a worldwide name and made its
name in almost more than 200 countries. The company made the products available in the
urban and rural area that is helpful for the customers as well as for the company. Apart from
having the chains of dealers and retailers, the company also offered products through online
channels.
PEOPLE
People are the persons who are directly or indirectly connected to the organization these
includes the salespersons and the staff. The organization needs to recruit the persons who have
proper knowledge of the field to have the skill through which they can contribute to the
development of the organization. As Henri Nestle established the Nestle organization and after
some time sells his company and organization to three local businessmen. They employ chemist
and skilled workers for the expansion of the product and sales. Also, the company included
Peter and Kohler for the production of chocolate. Nestle expanded the business by including
the people who have the willingness to work and also have the skills that play an important role
in the development of the business.
PROCESS
The process is a strategy used by the organization for serving the customers. If the services
provided to the customer are good then it leads to the popularity of the brand. For providing
better services to the customer the company needs to value their customer’s money and time.
Nestle is one of the biggest food company in the world and for maintaining the status the
company needs proper planning for serving the customer. The company needs to focus on the
willing of the customer and strategies to fulfil the needs. The customer wants a good quality
product with better services which can be provided by valuing customer's money and time. If
11