Introduction:
The report aims at providing an overview of the marketing elements of a well known brand. The company chosen here is Nestle, Australia and the brand chosen comprises of the products of the Nestle brands. Nestle was found in 1908 with the headquarters in Rhodes, Australia (nestle.com 2019). Nestle not only markets but also manufactures various food products and beverage in Australia. Nestle even undertakes exporting its own products. The company however operates as one of the subsidiaries of Nestle SA that is a Swiss based translational drink food as well as drink Company with its headquarters in the Vevey, Vaud, Switzerland.
The report commences with a brief snapshot history about the brand and focuses on the brand elements which include the logo, attributes, slogan and values. The report also focuses on the financial value of the brand, trends in the brand value and the value compared to the key competitors. The report also provides an insight into the market positioning including the USP, target market and competitive advantage. The report also gives an overview of the social media communities and the loyalty programs. There are also discussions regarding the potential threats of the brand with sole focus on the competition, economics, change in the market needs and technology.
Nestle was started in the year 1867 in Vevey Switzerland when its founder, Henry Nestle, led to the creation of food for the infants while responding to needs for the healthy and the affordable products that served as the alternative to the mothers who were unable to breastfeed babies(nestle-ea.com 2019). The product came to be known as the Farine Lactee. In the year, 1905, Nestle and Anglo Swiss Condensed Milk Company was formed due to merging of companies. In the year 1919, the company took over two of the condensed milk plants in the Oregan from Geibisch and Joplin for a whopping $ 250,000. Nestle however experienced a dynamic phase after end of the Second World War. This not only accelerated growth but also let to the acquiring of various companies. It was in the year, 1947 that Nestle merged with Maggi, the manufacturers of soups and seasonings. The period between 1990 and 2011 was marked as the international growth of Nestle. In July, 2011, Nestle SA bought close to 60 percent of the Hsu Fu Chi International Ltd for close to about 1.7 billion US dollars. The company also acquired the unit of Pfizer Inc’s Infant nutrition for about 11.9 billion US dollars. The period from 2012 to 2018 marked the recent developments of Nestle. In the recent years, Nestlé Health Science, made various acquisitions including Vitalflo, CM&D Pharma Ltd and Prometheus Laboratories. The company also holds a minor stake in the vital foods that specializes in providing solutions based on Kiwifruit for treating the gastrointestinal conditions. In the year 2018, announcements were made where Starbucks and Nestles stuck a distribution deal of close to $ 7.15 billion that allowed Nestle to not only market but also distribute and sell Starbucks coffee on a global scale along with incorporating coffee variability of the brand into the proprietary system of Nestle thereby leading to an expansion of the overseas market for both the companies.
Logo: Nestle brand comes with a nest logo which represents the graphic translation of the name of the founder Henri Nestle meaning ‘little nest’. This acted as a vital corporate identity (nestle.com 2019).
Slogan: The tagline ‘Good Food, Good Life’ of the Nestle brand represents the promise of the brand in enhancing the lives of the people through good food and beverage (nestle.com 2019).
Attributes: Nestle is one of the leading health, nutrition and wellness company with close to 140 years of operation(5). The company started its operation with the baby foods which was followed by the production of dairy products and chocolates in the year 1938. The company constantly innovates in order to keep pace with the fast changes of the world for delighting the customers.
Values: Nestle coupled integrity with the strong work ethics and desired to put across quality work. The brand puts across the spirit of openness and cooperation to the opinions and the ideas of the others (nestle.com.au 2019). Nestle believes in following a realistic approach to business and creates an openness for new business opportunities and the future trends. Nestle responded to the health concerns by cutting down the salt and sugar in the breakfast cereals for selling Cheerios, one of the cereal brand of Nestle in close to 140 countries and accounted for a global sales figure of about USD 25 billion.
Financial Value of Brand:
Nestle is one of the biggest and the most renowned food company across the world with market capitalization of close to 231 billion Swiss francs (CHF). In the year 2014, the consolidated sales amounted to about 91.61 billion Swiss francs where the net profit was close to 14.46 billion Swiss francs (nestle.com 2019). However, the investment on the research and development amounted to 1.63 billion Swiss francs.
Sales figures with respect to each of the categories are as follows:
P percentage of Sales in terms of the breakdown in the geographic area:
The company has a reputation score of 74.5 as per the global survey for its online consumers.
The financial value of the brand is as follows:
|
Year |
2013 |
2014 |
2015 |
2016 |
2017 |
|
Assets |
120.442 |
133.450 |
123.992 |
131.901 |
130.380 |
|
Revenue |
92.158 |
91.612 |
88.785 |
89.469 |
89.791 |
|
Net Income |
10.015 |
14.456 |
9.066 |
8.531 |
7.183 |
|
Employees |
333,000 |
339,000 |
335,000 |
328,000 |
323,000 |
The trends in the brand value of Nestle are as follows (nestle.com 2019)
Building on the, Health, Nutrition and the Wellness Strategy: The aim of the brand lies in providing the healthiest and tastiest choices at all times and in all the stages of the life that is delivered in time saving and convenient manner. The brand puts across healthcare products that enabled the people in meeting the wellness and the health goals.
Serving and Understanding the Consumer: Nestle believes in the identifications of the consumer trends and acting accordingly for capturing them so that the brand remains in the forefront of the Fast Moving Consumer Goods (FMCG) industry.
Ensuring Accelerated Growth: The brand believes in the creation of long term value that is the result operating and growth efficiency. Nestle ensures the achievement of top line sustainable growth through selective investment in the higher growth categories and geographies.
Increase in Efficiency: The brand remains committed towards the marginal expansion and have developed an underlying target of profit margin from 17.5 percent to 18.5 percent in the year 2016. The primary driver of the brand remained in reducing the structural cost in non consumer areas
Prudent Allocation of Capital: Nestle have a stronger portfolio, with profitable platforms for growth and market positions in various categories. This enables the company in taking a focused and prudent approach towards allocation of capital thereby ensuring a long term futuristic growth.
Creation of the Shared Value: This helps the brand in creating value for both the society and the shareholders.
Value Compared to Main Competitors:
In comparison to the key competitors, Nestle created value through enhancing the quality of the life and making a contribution towards the healthier future with the aim of delivering industry leading, sustainable and financial performance thereby earning trust. Nestle also mentioned that its pricing strategy enabled it in achieving small pick up across the markets which led the share prices of the company to rise by 2.9 percent. Nestle also believed investing in the strongest brand while carrying out divestment in the under underperforming businesses, improved structural efficiency and improved capital allocation for driving the growth and preserving the margins (nestle.com 2019). Improvements in the geographical locations have enabled Nestle in stripping the foreign exchange and the divestments and acquisitions and enhance the sales of the group by 68.4 billion Swiss francs. Besides, the growth momentum of the company is expected to deliver 5 percent growth in the entire year in comparison to the competitors.
USP: Nestle represents the biggest health, wellness and food processing brand across the world (nestle.com 2019).
Competitive Advantage: The aim of the company lies in enhancing the lives of the consumers on a day to day basis by providing healthier, tastier beverages and food choices for a healthier lifestyle( Brem, Maier and Wimschneider 2016.). The brand puts across a promise to the consumers for providing safe and higher standard of food. Therefore, the competitive advantage of the company lies in:
Target Markets: Nestle inspected the various types of market segment based on the growth and size and structural attractiveness to introduce its operation in Australia (Payaud 2014). The brand distributes the target market due to the unique wants and requirements of the target market. Thus, Nestle Australia chose its target market based on the following coverage policy.
Differentiated Marketing: Nestle chose the target market based on the differentiated marketing and provided different products based on the occupation, age, season and the climate of Australia (Toften and Hammervoll 2013). For instance, Nescafe 3 in 1 primarily targets busy customers while the Koko Krunch and Nesquick are targeted to those who wanted to get the taste of the real chocolate. Necafe Ice is targeted for the customers in the hot and the warm weather.
Concentrated Marketing: This helped Nestle in earning a stronger position in the market since it allowed the brand to have good knowledge about the customer requirement (Dawson 2014). For instance, the brand offers nutrient rick milk powder Lactogen 1 for the babies up to 7 months of age while the Lactogen 3 is for babies with age not beyond 12 months. Nestle also puts forward cerelac and ceregrow for babies over 12 months of age.
Loyalty Programs: Nestle broke its ranks with major supermarkets through putting across its own reward programs (nestle.com 2019). The company offers discounts to the instant coffee customers depending on the coffee purchases. The brand holds a market share of over 65 percent on its instant coffee and aims at cementing the product loyalty. The program aims at increasing the communication between the customers and company depending on registration of the purchases for getting the rewards. In other words, Nestle program is one of its kinds in Australia since it depends on a specific product for establishing its loyalty program.
Social Media Communities: Nestle focuses on being active on the social media platforms like Facebook, Twitter, Instagram, Pinterest and You Tube. The pages on the various social media platforms are dedicated to health, wellness and nutrition. It also delivers information related to the latest and the updated events (nestle.com.au 2019).
Competition: Nestle experiences tough competition in all the product segments from competitors like Unilever, Danone, Sara Lee, Kraft Foods, Mars Incorporated, Hershey’s and the Parle Product Ltd.
Economics: Economic recession and instability adversely impacts Nestle as it one of the global player. Besides, the increase in the raw material cost influences the profit margin.
Technology: Backward integration for gaining more control over supply chain makes it not only complex but also affects the business. Besides the innovation brought about by the technological advancements also acts as challenges.
Changing Market Needs: The changing market needs due to the presence of health conscious consumers Nestle made an acknowledgement stating that whether it is the reducing the sugar or addition of natural flavors, the company looks forward in making healthier and tastier choices.
This part of the report concentrates on submitting and developing a 12- month integrated marketing communication plans for the Nescafe Gold from Nestle.
Target audience:
They represent the segment of the market where an individual group is believed to be the potentials for patronizing the offerings of the company and thereby providing a response in terms of what the brand offers. In other words, it represented the portion of qualified market where the organization ventures eventually. Hence, segmentation and target market helps the firm in narrowing the options and service only the sectors possessing purchasing power and higher levels of feasibility. Thus, the target audience of the Nescafe Gold campaign is as follows:
Frequency: The integrated campaign for Nescafe Gold comprised of two TVCs, one portraying the series of content led by influencers that implied outside home activations including the pop up for barista coffee while the other portrayed content based on samplings collected in the train station. The motive lay in supporting the re launch of the Nescafe Gold that included the features of the improved recipes along with an update on its classic packaging into a modernized design.
Reach: The campaign of Nescafe Gold tried to showcase that meaningful connections are not only precious and rare but are worth saving since they enrich people’s life in the truest sense. It is to be noted that individuals will meet close to 80,000 people in a lifetime but it is only a handful of them who creates a special memory. The integrated campaign for Nescafe Gold helps in bringing those connections into life through new and emotive TVCs . It tries to daw a linkage between the care people puts into a relationship and the attention and care that goes in the making a cup of the Nescafe Gold.
Coverage: The integrated campaign is live till December, 2019 and covers entire brand immersion outside the home locations including the Southern Cross Station and the Martin Place Train Station. This would result in Nescafe Gold in reaching to over 1 million commuters. Besides, there would be experiential sampling taking place through varied number of pop-up cafes of Nescafe Gold that would act as an extension of their in store baristas. The newly launched range of Nescafe Gold would also be available in Coles, Woolworths and various other independent retailers.
Key message Objectives: The objective of the integrated campaign has been in delivering quality taste through a newer range of coffee that would continue in exceeding the expectations of the possibilities of an instant coffee. The campaign also aimed at developing an impressive customer experience that would incredibly serve 500,000 coffees across the nation.
Making an appropriate choice of communication channel will help in determining the efficiency and the effectiveness of the intended message that influences the target audience. Nestle will consider these aspects before dissemination of the intended messages to public. (Broadbent 2013) put across the importance in choosing the appropriate media as it helps in determining the effectiveness, efficiency, cost, economy, impact, reach and frequency. Print media refers to the use of the magazines, posters and flyers for passing on the messages across the public. Electronic media on the other hand comprises of television adverts, radio commercials, media houses, electronic bill boards and internet or email services. Television acts as effective medium as a result of its huge coverage and the ability of creating awareness and stirring certain interest amongst the target market. Print medium allows for a increasingly visual display in a persuasive manner. Magazine ads and the electronic billboards can provide an easier explanation on why consumers should opt for products. The other communication channels that involved the application of marketing tools include sales promotion, public relations, direct marketing and personal selling and advertising.
The Nescafe Gold was launched via a television campaign that helped in looking at coffee through interpersonal and powerful lens that provided the bedrock for the launch of the Nescafe Gold in New Zealand and Australia. This helped in creating a higher impact locally and augmented the television campaign thereby ensuring a stronger visual impact in the market.
The TV advertisements will be launched in 4/01/19 and finish on 11/01/19
The Radio ads would be launched on 11/01/19 and finish on 18/01/19
The Print ads would be launched in 10/01/19 and finish on 25/01/19
The Internet and the Banner ads launched in 9/01/19 and finish on 24/01/19
The Outdoor Billboards ads was launched in 12/01/19 and finish on 25/01/19
The ways of determining the success of the company has been through past years of operation via which customer base is recorded. Nestle being one of the largest food and beverage company across the world comprising of close to 2000 brands that ranged from the global icons to local favorites and present across 189 countries across the world portrayed the level of satisfied customers of the company and the presence of repeat purchase. Another striking feature lay in the level of the turnover intentions and employee satisfaction since employees represented the key elements and one of the important resources for the organization. Therefore, keeping them happy ensured better productivity and performance. Corporate Social Responsibility (CSR) represents a situation where business operates as the pointer of the success attainment. It is not only enough in taking from environment but also giving back to community (Hoi, Wun and Zhang 2013). CSR represents an idea that involves the economic, social and environmental aspects of a particular business.
As Corporate Social Responsibility (CSR) of Nestle Australia lies in enhancing the quality of the life and contributing to the healthier future (nestle.com.au 2019). Nestle takes an initiative for helping close to 50 million children towards healthier lives. The brand contributed to the community by helping in improving close to 30 million livelihoods that remains directly connected to the business activities. Nestle Australia also strives for lower environmental impacts through its operations.
Contingency planning referred to the course of the action designed for helping the organizations in responding effectively towards significant situation or event that might or might not take place (Sadgrove 2016). Contingency plan is often referred as the ‘Plan B’ since it is considered as the alternative actions provided the expected results failed in materializing. For instance, if the latest creative on the Nescafe campaign by Publicis Sydney fails then as a Plan B, the media agency MEC can partner with the Australian marketing agency, Social Soup for launching the campaign on the Nescafe Gold. This will help in showcasing quality and authentic content by the highly involved micro influencer community that helps in recognizing the influence and the role of influencer generated content along the branded content within marketing mix.
The steps towards contingency planning include:
TV advertisements = $ 40, 000
Radio advertisements= $ 18,000
Newspaper and Magazine advertisements and Inserts= $ 24,000
Internet Advertisements = $ 28,000
Outdoor Billboards = $ 7000
Total=$ 117,000
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