Marketing Project: An In-Depth Analysis of Nestle's Strategies

This marketing project provides a comprehensive analysis of Nestle, a leading food processing company. It begins with an introduction to marketing and its importance for organizations, using Nestle as a case study. The report includes a company background, followed by an environmental analysis using the PESTLE framework. It then explores Nestle's buyer behavior, competitor analysis using Porter's Five Forces, and market segmentation strategies. The report also examines Nestle's positioning and marketing mix (product, price, place, promotion). Finally, it identifies challenges faced by Nestle, such as global competition, food standards, and legal allegations, and offers recommendations for improvement. The analysis highlights Nestle's strengths in brand equity, customer loyalty, and product differentiation, while also addressing the need for adaptation to maintain its market position.

Marketing Project

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
QUESTION 1...................................................................................................................................1
Company background.............................................................................................................1
QUESTION 2...................................................................................................................................1
Environmental analysis of Nestle...........................................................................................1
Buying behaviour of Nestle....................................................................................................2
Competitor analysis of Nestle................................................................................................3
Market segmentation of Nestle...............................................................................................5
Positioning of Nestle..............................................................................................................5
Marketing mix of Nestle.........................................................................................................6
QUESTION 3...................................................................................................................................6
Challenges and recommendations for Nestle.........................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INDEX OF TABLES
Table 1: PESTLE analysis of Nestle................................................................................................2

INTRODUCTION
Marketing refers to activities which are associated with buying and selling of
commodities and services of business entity. It is set of process for communicating, delivering
and exchanging products that have value for customers and clients. Organisations use several
marketing strategies to accomplish defined goals of the company (Gummesson, 2002). Nestle is
taken as case study to understand importance of marketing strategies for an organisation. The
main objective of marketing strategy is to increase sales and attain competitive advantage.
QUESTION 1
Company background
Marketing policies have benefited many companies to grow and expand itself in domestic
as well as in the global market. Nestle is an appropriate example of business enterprise that has
reached heights with effective marketing strategies. It is a food processing company that
provides twenty-nine products in the global market. The services range from baby food, bottled
water to frozen food and breakfast cereals. In addition, products like coffee, tea, dairy items, ice
cream and snacks are also manufactured for potential market. The company was founded by
Henri nestle, Charles Page and George Page. The organization functions in 194 countries and
employs around 339,000 people. As the company has grown significantly during First and
Second World War the offerings has expanded to condensed milk and infant formula products.
The present report introduces core theories of marketing used in concerned company. It conducts
environmental analysis of Nestle that defines clear impact of external forces in which
organisation operates (Hult, Hurley and Knight, 2004). Further, it evaluates buyer behaviour of
existing and new customers to better understand their needs and demand. The assignment also
undertakes competitive analysis of Nestle which highlights challenges and opportunities
mentioned company faces from its strong rivalries.
QUESTION 2
Environmental analysis of Nestle
For successful implementation of marketing policies, the marketing team of mentioned
business entity undertakes environmental analysis. It is a strategic tool to identify external and
internal elements which effects organisations performance in the market. The analysis entails
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level of threat or opportunity faced by Nestle. There are several strategic tools that firm can use
but most effective one is PESTLE analysis. It consists of various factors that affect business
environment of Nestle. Each letter in the acronym reflects factors influencing concerned food
processing industry directly or indirectly (Vargo and Lusch, 2004). Now, the given below table
describes PESTLE Analysis of Nestle:
Table 1: PESTLE analysis of Nestle
 Political
It includes factors like changing food standard
regulations and marketing actions. Political
stability and instability also determines Nestle
smooth functioning.
 Economic
Inflation, economic growth rate and income
level are major forces influencing Nestle
working environment. The managers study and
evaluate these three factors.
 Social
The consumer behaviour and attitudes taken in
consideration ensures personal approach to
marketing. Changing lifestyle and different
cultural settings are also included in social
factor (Grönroos, 2007).
 Technological
Innovative technological development like e-
commerce platform to purchase and sell Nestle
products is significant example of technical
factors influence.
 Legal
There are different international laws and
regulations to be followed by Nestle
organisation strictly to avoid conflict situation.
 Environmental
Nestle adopts corporate social responsibility
principle for its environmental concern in the
global market (What is Environmental
Analysis. 2015).
Buying behaviour of Nestle
Buyer behaviour can be defined as a systematic approach which consumers follow for
buying and purchasing products in the market. Nestle marketing team uses this approach to
understand and analyse consumption habits of individuals or people. Marketing strategies relies
on step -by -step consumer decision making process. The concerned company is required to
focus on following points to understand its potential buyer’s behaviour:
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 Type of buying decision: There are different types of buying behaviour decisions such as
logical, impulsive and emotional motivations. Nestle possess large involvement of
consumer’s making repetitive buying and purchasing food items. The logic behind this is
its brand image and excellent product manufacturing techniques (Wilson and Gilligan,
2012). Steps involved in buying process: Several steps are processed when a consumer plans to
purchase commodity. Firstly, recognition or necessity to purchase depends on internal
and external stimuli. Later, information is gathered about various options available in the
market and they are evaluated stringently. The final step is to take purchase decision and
again configure that the product meet expectations of consumer.
 Social aspects of buying: Consumers also have some responsibility towards the society in
context of purchasing decision. Social purchasing reflects multiple social impacts on
purchasing such as social inclusion, poverty reduction, community economic
development and employment opportunities (Jüttner, Christopher and Baker, 2007).
Competitor analysis of Nestle
Nestle needs to identify its prominent competitors in the market and evaluate their
strategies to make its own effective marketing techniques. Nestle will make use of Porter's %
five force model to examine competitor’s influence over the company.
Threat of new entry
Nestle has accomplished strong brand image in the market but as operating in food
processing industry there is threat of new entrants. Every year number of companies attempt to
establish themselves but they could not cross Nestle in terms of market share.
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Illustration 1: Porter's 5 force model

Buyers bargaining power
Another factor is bargaining power of customers in the market. They are responsible to
rank and evaluate company's position in the market. Nestle has maintained product quality and
gained customer loyalty in the market. So, the buyer’s bargaining power is moderate for
mentioned organisation (Doyle and Stern, 2006).
Suppliers bargaining power
The suppliers are essential factor for the industry to strengthen continues flow of raw
materials. Nestle is well known for strong relations with suppliers of food items. Suppliers
bargaining power is strong in the company as it requires bulk amount of dairy and agricultural
products. Suppliers are liable to avail fresh and good quality of raw material.
Threat of substitutes
Substitutes refers to those products which shifts interest of consumer from one product to
other that is more or less similar in features (Aaker, 2008). Nestle is required to adopt
tremendous changes in its existing products to retain its position in the market.
Industry rivalry
Nestle has a very strong position in food processing industry but it faces strong
competition from leading food processing entities like Unilever, Kraft and Pepsico. The
company is required to focus on effective marketing and advertising strategies to increase its
market share in highly competitive world (Cravens and Piercy, 2008).
Through above Porter's five forces model, it can be assumed that Nestle has always
focused over satisfying customer’s needs and demands in an effective manner. The analysis
reveals that Nestle has build strong brand equity in the market. Buyers bargaining power is
moderate for business entity while suppliers bargaining power is comparatively strong in the
market. Further, Nestle faces threat of substitute products which can be understood by frequent
introduction of new brands its launching in market. Rivalries like Unilever, Kraft and Pepsico
provide strong competition by featuring great quality products (Johnston, 2013). They certainly
make use of product differentiation technique to ensure that their respective market position
retains.
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Market segmentation of Nestle
The concept of market segmentation deals with classifying broad target market into small
segments depending upon various factors. Consumers with common needs, interest and priorities
will be grouped together. It helps organisations to manufacture products according to segments
made by marketing manages. The classification is made on following basis: Geographic segmentation: The classification is made on basis of geographical conditions
of a country. Like for instance it avails coffee products in hot and cold form. During
warm season consumers prepare coffee with normal, chilled or cold water mixing ice
cube to bring real taste (Hair, Bush and Ortinau, 2003). Demographic segmentation: While, classification on the basis of age, gender, religion
and income of consumers is demographic segmentation. Its products like cerelac,
lectogen, nido and koko krunch focuses on market segment covered by new born babies
or children of different age. Psycho graphic segmentation: Here, segmentation takes place on the basis of lifestyle
and attitude of individuals. Product like KitKat is available for chocolate lovers in the
market. Nescafe 3 in 1 is produced especially for those users and customers that are
completely engaged in many activities and have not much time (Lovelock and Wright,
2011).
 Behavioural segmentation: When classification depends upon consumer loyalty towards
company behavioural segmentation take place. Generally, parents trust cerelac as best
food product for their babies as involves two basic components required for infant growth
i.e. rice and milk. This has benefited and satisfied consumers on behavioural basis.
Positioning of Nestle
The efforts made a company to produce commodities and services are evaluated through
market positioning. It refers to rank occupied by a business entity in customer minds relative to
product purchased. Nestle make use of different positioning strategy to establish brand image in
the market. Firstly, it adopts product differentiation policy like for baby food products. It avails
twenty five minerals in Nindo for children (Johnson and Selnes, 2004). Secondly, channel
differentiation strategy where Nestle marketing managers uses different channels like retail
outlets, wholesalers and online grocery stores to avail exclusive range of products in global
market.
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Marketing mix of Nestle
Nestle is a well known brand that accommodates a thousand of products in market. Its
marketing mix comprises four major factors that are described below: Product: Nestle avails almost six thousand food and nutrition products in global
economy. Before introducing a commodity it is first screened through high profile
research and development. Price: The Company follows flexible pricing policy which acts as key factor for Nestlé’s
success. Their marketing strategy includes wide range of pricing policy that offers
products at competitive price. Place: Nestle operate across eighty-six countries and still planning to expand its trade in
international market. The sales are generated globally and it avails variety of products in
maximum outlets (Christopher and Towill, 2002).
 Promotion: Marketing team of Nestle focuses on influential marketing and advertising
strategies. Promotion is made through electronic, print media and sign boards tempting
consumers to trust Nestle for satisfying their demands.
QUESTION 3
Challenges and recommendations for Nestle
From the above analysis it can be evaluated that Nestle is facing various challenges in
global market. The company provides wide variety of products and services across 194
countries. Its major challenges are described as below: Global competition: Nestle faces strong global competitiveness through various leading
food processing companies like Unilever and Kraft. Global competition refers to products
and services provided by competing companies that serve international customers. In one
manner international trade is fruitful concept for the organisation but it adds global
competition to the process (Jüttner, Christopher and Baker, 2007). Food standards: The concerned company is popular for best quality production capacity
of products. But, production and marketing team is pressurised to equally maintain food
standards of commodities. It is a food processing company and is responsible to avail
safe, healthy and nutritional products to potential consumers.
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 Legal allegations: Another challenge faced by Nestle legal controversies and criticism in
global market. Recently, one of its product line Maggi was banned for few months in one
of the largest potential market that is India. The government on recommendations of
reports published took this sever action against Nestle (Gummesson, 2002). It was proved
that Maggi possessed lead and other harmful elements as its main ingredients that
troubled health of native people.
In order to face these challenges effectively the company needs to focus largely on its
strong production and marketing policies. Product differentiation strategies will benefit
organisation in global market. While proper market research and study will prevent the company
from further legal criticism. Nestle should make efforts in maintaining set food standards and
control usage of unethical food practices (Johnson and Selnes, 2004).
CONCLUSION
It can be concluded from the above report that for successful establishment of an
organisation marketing strategies plays a key role. Nestle is eminent transitional food and
beverage company providing thousands of products in global market. The report makes use of
PESTLE analysis through which it has been found that Nestle need to changes its policies and
strategies due to political, economic and social condition.
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REFERENCES
Books and Journals
Aaker, D. A., 2008. Strategic market management. John Wiley & Sons.
Christopher, M. and Towill, D. R., 2002. Developing market specific supply chain strategies. The
International Journal of Logistics Management. 13(1). pp.1-14.
Cravens, D and Piercy, N. F.,2008. Strategic marketing. McGraw-Hill Irwin.
Doyle, P and Stern, P., 2006. Marketing management and strategy. Pearson Education.
Grönroos, C., 2007. Service management and marketing: customer management in service
competition. John Wiley & Sons.
Gummesson, E., 2002. Relationship marketing in the new economy. Journal of Relationship
Marketing. 1(1). pp. 37-57.
Hair, J. F., Bush, R. P and Ortinau, D. J., 2003. Marketing research: Within a changing
information environment. Richard d Irwin.
Hult, G. T. M., Hurley, R. F. and Knight, G. A., 2004. Innovativeness: Its antecedents and impact
on business performance. Industrial marketing management. 33(5). pp.429-438.
Johnson, M. D. and Selnes, F., 2004. Customer portfolio management: toward a dynamic theory
of exchange relationships. Journal of Marketing. 68(2). pp. 1-17.
Jüttner, U., Christopher, M. and Baker, S., 2007. Demand chain management-integrating
marketing and supply chain management. Industrial marketing management. 36(3).
pp.377-392.
Lovelock, C. and Wright, L., 2011. Principles of service marketing and management. Prentice
Hall.
Vargo, S. L. and Lusch, R. F., 2004. Evolving to a new dominant logic for marketing. Journal of
marketing. 68(1). pp. 1-17.
Wilson, R. M. and Gilligan, C., 2012. Strategic marketing management. Routledge.
Online
Johnston. E., 2013. 5 steps to understanding your customer's buying process. [Online]. Available
through: <https://www.b2bmarketing.net/resources/blog/5-steps-understanding-your-
customers-buying-process>. [Accessed on 2nd April 2016].
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What is Environmental Analysis. 2015. [Online]. Available through:
<http://pestleanalysis.com/what-is-environmental-analysis/>. [Accessed on 2nd April
2016].
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