Detailed Analysis of Nestle's Marketing Strategies and Processes

This report provides a detailed analysis of Nestle's marketing strategies. It begins with an introduction outlining Nestle's mission and objectives, followed by an examination of the marketing process. The report includes a PESTLE analysis, SWOT analysis, and Porter's Five Forces analysis to assess the external and internal environments. Furthermore, it explores Nestle's marketing strategy, including segmentation, targeting, and positioning. The marketing mix decisions (product, price, place, promotion, physical evidence, processes, and people) are discussed in detail. The report concludes with an impact analysis and a discussion of stakeholder engagement in marketing activities. The report highlights Nestle's strengths, weaknesses, opportunities, and threats within the food industry, providing a comprehensive overview of its marketing approach.

MARKETING

TABLE OF CONTENTS
1.1 INTRODUCTION.....................................................................................................................1
1.2 Marketing Process......................................................................................................................1
1.2.1 Analysis of Mission and Objective................................................................................1
1.2.2 Situation Analysis..........................................................................................................1
1.2.3 Marketing strategy.........................................................................................................4
1.2.4 Marketing mix decisions...............................................................................................5
1.2.5 Implementation and control...........................................................................................6
1.3 Role of marketing in value of creation for customers................................................................7
1.4 Stakeholder engagement and their impact on marketing activities...........................................8
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

1.1 INTRODUCTION
Marketing is an essential tool for company in gaining promotional activities in effective
manner. Present report deals with Nestle which is engaged in food sector and mission and
objectives are presented. SWOT, PESTLE analysis and Porter's five forces are discussed as well.
Impact analysis is made and stakeholder engagement in marketing both are explained with
relation to company. Moreover, marketing mix is produced and thus, overall marketing plan is
made.
1.2 Marketing Process
1.2.1 Analysis of Mission and Objective
Mission
“Make better and nutritional food so that people may live a healthy life and to bring vital
ingredients of taste and pleasure for maximising satisfaction.”
Objectives
 To become market leader in health, wellness and nutrition
 To effectively promote leadership and accomplish trust by satisfying customers.
 To create sustainable value for long-term purpose
 To make perfect alignment of staff behind strategic activities for enhancing organisation's
growth.
1.2.2 Situation Analysis
PESTLE Analysis
Political (P)-
Main factor which is affecting Nestle is changes undergoing in various regulations of
food standards and marketing actions. Various economies have diversified regulations affecting
company as a whole and as such, quality standards are of utmost important to it. Taxation
structure, excise duties imposed on import and export are much vital to be followed by
organisation (Haseeb. 2017).
Economical (E)-
Economic policies of various nations are entirely different and as such, business has to
follow the norms and rules of nations so as to make its position secure enough. Inflation rate and
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purchasing pattern or behaviour of people should be analysed quite effectively. Nestle is helping
farmers by purchasing raw materials directly from them.
Social (S)-
Life style, norms and preferences have been effectively carried out by the company
implying that social responsibilities are stuck to organisation's ethical policies. Consumer
changing attitude is well-understood by company.
Technological (T)-
Nestle has used technology-driven tactics so as to produce its variety of range of products
in the best possible manner. It maintains databases for customers' transparency needed for
accelerating future sales. It is using state of art technology to produce commodities quite
effectually (Lovelock and Patterson, 2015).
Legal (L)-
Organisation has to ensure that it follows regulations which are inevitable by its nature.
Global or international laws particularly of food and health standards have to be adhered strictly
for uninterrupted operations in the world. Hygiene products are produced by abiding regional
laws as well.
Environmental (E)-
Nature is a blessing to humans. Nestle has to make production in a manner which may
not harm environment. Production system needs to be updated so that no harmful gases could
emit affecting nature up to a high extent. Packaging should not be made in plastic wrapper as it
harms environment.
SWOT Analysis
Strengths (S)-
Main strength of Nestle is well-renowned brand in the world. It has good reputation and
brand image in market providing great level of satisfaction to customers. Organisation has its
presence in 195 countries which speaks off well about brand identity. Another strength is strong
R&D which helps in exploring healthier and variety of products for consumers as company has
40 R&D product centres (Armstrong, Kotler, Harker and Brennan, 2015).
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Weaknesses (W)-
Controversies have been revolved around organisation affecting its brand image. Some of
it includes bottled water conflict, child slavery and recently observed of famous product Maggi.
It has been found guilty of flouting international laws and global food standards. Another
weakness is related undifferentiated brand structure as many of its products are much similar and
product differentiation is not found.
Opportunities (O)-
Nestle have number of opportunities to make more strong its international presence and
outreach rivals. It can enter into mutual partnerships so as to diversify business. Moreover, it is a
shareholder of Loreal Organisation paving the way of strategic alliances. Distribution system is
more of offline base but it can tap into online delivery system of own which will cut-down
distribution expenses and faster delivery of commodities to end users (Brown, 2016).
Threats (T)-
Major threat is entry of competitors in the market seeking growth of organisation in food
and drink market. Existing competition from Kraft Foods is another obstacle for Nestle as profits
are impacting quite badly. Rising price of raw materials is another threat which will impact
because it is engaged in manufacturing sector and more prices means high prices would be
charged affecting purchasing power.
Porter's five forces
Threat of new entrants-
Food industry in which Nestle is a market leader is undergoing significant changes
because more companies are tapping in market for attaining share which is a major threat to
organisation affecting profits up to a high extent. However, since it is a renowned brand, new
firms have to compete with Nestle for snatching share to survive in the long run. Product quality
and customer satisfaction are main positive aspects of company. This means that threat of new
entrants is low (Baker, 2016).
Substitutes threat-
Daily products which customers prefer to buy have high substitution power. Nestle's
commodity of bottled water is more common among the industry as it has lean pockets which is
the biggest substitute for company. In relation to this, nestle has to make innovative techniques
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for overcoming substitutes so as to remain in market. It has already implemented various policies
with regards to wellness factor which will be fruitful for company in attaining goals and
removing threat of substitutes.
Bargaining power of suppliers-
Suppliers are the main source of company particularly engaged in production. In the
similar manner, nestle has strong connections with suppliers around the market and effectively
produces commodities. In relation to deepen purchasing power and as such, quality of milk and
dairy products are utmost important. Nestle has focused on maintaining cordial relations with
suppliers and also has provided with ways by which suppliers may initiate control upon
expenditures. Thus, it provides suggestions and helps suppliers to redundant expenses (Fill and
Turnbull, 2016).
Bargaining power of customers-
The bargaining power of consumers in the market and they also carry huge amount of
power for organisation's variety of commodities. Nestle is being able to successfully achieve
food products in accordance to needs and preferences of customers and as a result, customers are
delighted by the fact that firm is able to provide items at competitive prices. Society is inclining
towards health conscious and thus, nestle is effectively incorporating changes so as to impart
healthy and nutritious food to customers.
Rivalry in industry-
Rivals have to perfectly analysed by company because strategies have to be deployed in
that manner by which Nestle may achieve stated objectives in the best possible way. Rivalry is
common and organisation has strong presence in the market by which competition can be
effectively overcome. Kraft Foods and Groupe Danone both are competitors which are fighting
for more of market share. In relation to this, rivalry is benefiting customers as prices are reduced
because of cut throat competition. Hence, rivalry is high (Ashley and Tuten, 2015).
1.2.3 Marketing strategy
Segmentation
The segmentation is required for the company so as to attain clarity which are the main
segments of organisation from where good amount of revenue can be earned with much ease.
The segment of people looking for good quality products such as dairy and milk products, baby
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food products, food for pets and other confectionery commodities in which organisation has a
major stake and attains good quantum of profits quite effectually. Segmentation is making and
attaining unexplored market which is not tapped by organisation and as such, it is required that
market should be analysed and profits can be attained with ease. In simple words, searching for
untapped market is the basis for segmentation and thus, business is able to attain clarity
regarding needs and preferences of customers. Needs of selected groups of people are made and
thus, firm attains clarity as to which company can effectively achieve profits from segmented
markets.
Targeting
Targeting is one of the important part of company's strategies because it targets
customers which are provided with better products and are main requirement of company so as
to make available products to customers in effective way. Target customers of Nestle are upper
middle and urban middle class and focuses needs of customers. Market segments paves the way
for effectively targeting customers so that demands can be analysed. Different types of segments
are identified such as size and growth, segments and ages of consumers are also differentiated in
the best possible manner. Moreover, it has various products for different age people such as
Nescafe 3 in 1 for people who are busy in going to offices. Nescafe Ice is a cold coffee suitable
in hot and warm weather. Hence, targeting is the key for company to provide items to targeted
customers (Erevelles, Fukawa and Swayne, 2016).
Positioning-
Positioning is another marketing strategy being adopted by Nestle in order to effectively
position goods and create value for customers. Differentiation is the main strategy by which
company should perform in the market completely different from rivals so as to attain
productivity in effective manner. Since, food processing industry is highly competitive and as
such, it is required that organisation should effectively provide quality goods for maximising
satisfaction. Differentiation is one of the important strategy which needs to be analysed by
company by which Nestle products can be differentiated from its rivals and brand identity may
be managed and customers may purchase goods.
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1.2.4 Marketing mix decisions
Products-
There are variety of commodities being produced by company in order to tap markets in
the best possible way. Products are baby products, dairy commodities, cereals for breakfast,
confectionery, pet foods etc.
Prices-
The pricing strategy is followed in accordance to market and products. For Maggi,
skimming strategy is usually implemented as customers would not switch to other brand. While,
in Kit Kat and Munch, it uses competitive strategy as cut throat competition is seen in market
(Kumar, 2015).
Place-
Nestle follows FMCG strategy for involving variety of products. Organisation effectively
deploys distribution chain and goods are delivered in a timely manner. Trade discounts are
provided by Nestle and as such, distribution channel is benefited and faster deliveries are made.
Promotion-
Promotional tools are deployed by Nestle so that maximum sales can be accomplished.
Advertising through public relation as company tries to bring attentions towards resolving
problems in the best possible way and thus, issues are resolved. Digital marketing is done by
organisation as well.
Physical Evidence-
The physical evidence of company means that there should be physical delivery of
product which was made to customers. In similar manner, nestle provides goods to customers
and thus, firm may be easily attaining marketing.
Processes-
Execution is an important element which is made by organisation so that it may be able to
attain operational efficiency with much ease. Company has well-tailored processes by which it
effectively carries out production and reduce costs in a significant way (Lamberton and Stephen,
2016).
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People-
Employees are main personnel’s which help to attain sales for the company as efforts and
skills are applied by them benefiting whole organisation quite effectually. It is required that
people in target market could be analysed and thus, competitive advantage is attained.
1.2.5 Implementation and control
Impact Analysis
Implementation of marketing plan is essential so that promotional tools can be applied in
a better way. Through this plan, nestle will be able to attain competitive advantage in the best
possible manner. Moreover, since, it is well-renowned brand in food processing industry,
competition is moderate for it. However, in confectionery products, firm faces intense rivalry
from Kraft Foods, Groupe Danone. The pricing policies followed by organisation are different in
accordance to products. In Maggi item, customers are loyal enough and skimming strategy is
followed as organisation has competitive advantage over rivals.
Furthermore, employees are needed to provide better training sessions for enhancing their
overall productivity which is success of marketing plan. After this, evaluation and control needs
to be made so that plan may be successful. If loopholes prevail, then firm takes into account
factors where improvement is needed and corrective action is taken accordingly. Impact analysis
on Nestle will be moderate as it has successfully implemented strategies for marketing (West,
Ford and Ibrahim, 2015).
1.3 Role of marketing in value of creation for customers
Products-
The products offered by Nestle create value for customers as long range of products are
being available to them. It helps to achieve sales and satisfaction level is maximised.
Prices-
Prices of commodities are affordable for consumers and they provide good quality of
products to them. Hence, through such tactics, firm is able to accomplish desired sales.
Place-
The distribution channel is enhanced of company by which expenses are controlled in a
better way. This helps to attain good amount of revenue for the company.
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Promotion-
Advertising through digital technologies such as social media channels, commercials on
TV and other related tools help to create value for customers as they lure to buy goods
manufactured by organisation (Voorhees, Brady, Calantone and Ramirez, 2016).
Physical Evidence-
The delivery of commodities is made by company which means that physically products
are provided which helps company to attain maximum sales as transparency prevails.
Processes-
Timely delivery enhances customer satisfaction. Perfect execution made by systems and
operational functions helps to make delivery in time and customers becomes loyal towards brand
(Hunt, 2016).
People-
Workers are integral part of Nestle and imparting training and developing efficiency is
must as they are the ones by which consumers are able to get desired commodities and profits are
achieved. Hence, role of marketing is utilised for enhancing and creating value of customers.
1.4 Stakeholder engagement and their impact on marketing activities
Stakeholder engagement is modern marketing tool which is used in the company so that
marketing may be effectively attained. Engagement is used in advancing Nestle's mission and
objectives by effectually communicating, connecting with stakeholders so as to attain efficiency
with much ease. By its very nature, marketing is communication process by which relationships
are built with stakeholders. Marketing connects not only operations in attaining sales but also
induces and connects business operations with that of marketplace. This is possible because
company is required to engage stakeholders by which more expansion can be made by Nestle
and it can make strong presence in world market.
It is particularly important for Nestle engaged in food sector and good reputation is
accomplished. Trust-based relationships with various stakeholders such as customers, workers,
suppliers, creditors are required for sustaining in the market for long run (Andreasen, 2018).
Marketing is the key function primarily more important than other organisational functions as
communication is main element which is provided by company through marketing. Hence,
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stakeholder engagement is needed with the help of which, organisation could maintain
relationships with stakeholders and build stronger trust and transparency.
CONCLUSION
Hereby it can be concluded that marketing is one of the important function contributing
efficiency and productivity to company. In this manner, marketing mix decisions are vital so that
firm may attain sales by properly promoting and advertising items and lure consumer to buy the
same. By implementing marketing, nestle is able to make promotions and accomplishing sales
quite effectually.
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REFERENCES
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transformation of marketing. Journal of Business Research. 69(2). pp.897-904.
Fill, C. and Turnbull, S. L., 2016. Marketing communications: brands, experiences and
participation. Pearson.
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Lovelock, C. and Patterson, P., 2015. Services marketing. Pearson Australia.
Voorhees, C. M., Brady, M. K., Calantone, R. and Ramirez, E., 2016. Discriminant validity
testing in marketing: an analysis, causes for concern, and proposed remedies. Journal of
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West, D. C., Ford, J. and Ibrahim, E., 2015. Strategic marketing: creating competitive
advantage. Oxford University Press, USA.
Online
Haseeb. 2017. [Online] Available Through: <http://marketingdawn.com/pestle-analysis-of-
nestle/>
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