The report is about Nestlé’s marketing plan, the company’s activities in sustaining its leading position in the current market and product marketing including its new product Nescafe Menu. In addition, the report analyzes in detail the current marketing situation including PESTEL analysis, marketing environment, marketing plan and the marketing strategies applicable to the company in dominating the current market. The strategies of marketing will further involve discussions on the product, pricing, promotion and distribution strategies. However, the report will mainly focus on Nestle Malaysia, its newly launched products and its brand Nescafe. Additionally, the researcher will provide solutions and recommendations in overcoming the problems and solving the current scenario. Nestle Malaysia continues to play the role as the Halal food manufacturer leader and the first multinational which voluntarily requested for Halal Certification of all the company’s food products after its introduction in 1996. In 1989, Nestle was public-listed on Bursa Malaysia (Köse, 2007 p.78). Currently, Nestle has employed five thousand people, owned seven factories and six sales offices in Malaysia including one international distribution center. The head office for Nestle Malaysia is based in Petaling Jaya, Selangor.
Nestle is a multinational company which leads in food business globally. Founded by Henri Nestle who was a Swiss chemist, the company has the largest nutrition research capability which has its base in Switzerland and is the largest manufacturer of food in the world. Further research by Payaud (2014 p.57) shows that Nestle boasts of having its presence in over one hundred countries with an employment of 276,000 worldwide and four hundred and fifty-six people and four hundred and fifty-six factories in eighty-four countries. The organization currently owns 8,500 brands and produces over 10000 products which are different. Annually, the company sells over thirty-two billion products. Moreover, Nestle has twenty-four centers for research and development globally and makes an investment of RM5 billion each year on research and development (Wymer, 2011 p.20). Nestle Malaysia which is the biggest global Halal producer, engages in the marketing of Halal products. In addition, the organization has differentiated its marketing whereby the firm has targeted several market segments and has designed offers which are separate for each. Nestle Malaysia has utilized segmented marketing (differentiated marketing) strategy by having several product categories intended at targeting different customers.
According to Varma and Ravi (2017 p.16) dynamic government regulations surrounding the marketing options and standards of food affect the company. Nestle collaborated with various relevant Non-Governmental Organizations (NGO’s) in support of the efforts of the government of combating diseases which are non-communicable, during the Nutrition Month Malaysia campaign in promoting healthy nutrition in the community. In addition, in support of the efforts of the government in encouraging active lifestyles and healthier diets in order to assist in mitigating challenges associated with cardiovascular diseases, diabetes and obesity, the organization has made significant changes in improving the profile of its products to complement the efforts of the government in creating a healthier population. In addition, changing global regulations result in challenges in adapting to different political forces.
Domestic sales which are flat have reflected a change in the behavior of consumers in regards to spending where they spend less and save more and has resulted to a slowdown in the local economy which has affected the organization’s domestic business which has generally remained flat for the reviewed period.
The company is founded on social responsibility and sound human principles and values. In consideration, the population of Malaysia majorly consists of Muslims the trust and confidence of consumers on peace of mind and quality affect their purchasing behavior for the products of the company. Nestlé’s interest in Halal was due to the social responsibility and respect for the Muslim consumers and employees whereby the company has currently begun to appreciate the long-term investment it has been making in the marketing and manufacture of Halal products. To ensure social responsibility to the Malaysian community, Nescafe is produced locally to suit the preferences and tastes of local consumers although it is a global brand (Varma & Ravi, 2017 p.17).
All Nestle products undergo an extensive process of technological research and development before its launch so as to ensure that the trust and loyalty of consumers have been maintained. The customers of the company enjoy and benefit from the products of world-class manufacturing facilities, international safety and quality standards, the best private research and development capability in food and nutrition and products catered to local preferences through the use of high-level technology. In addition, the company is also committed to renovating and innovating products with a basis of scientific and technological trials and evidence.
Nestle has been affected by the changing nature of regulations. Therefore, the organization has been forced to adhere to global changes and regulations across various international markets. As a legal requirement, the organization is also required to pay taxes in all the countries which it operates in addition to other different legal obligations.
The business environment for the company has greatly been influenced by the increased attention which has been directed towards corporate social responsibility. Furthermore, consumers’ and employees’ concerns including the strategies for recycling, manufacture and packaging products have critically influenced the organization’s operations.
Nescafe uses the advertising of its product to promote the distribution, benefits, uses, features and the image of its products. The organization presents its advertising strategies through the internet, outdoor display, newspapers, magazines, radio and television. Therefore, consumers can have a look at the physical features and evidence of the product. In the 7 P’s of Nestlé’s marketing mix, process refers to the company’s public relations (Berthon et al., 2012 p.265). The public relation in the marketing 7 P’s of the organization’s marketing mix is used to promote the organization, the people, ideas and image and also create various specific images including concern for social issues, value, innovativeness and quality. Nestle uses different methods of marketing its products including event sponsorship, press releases and press conferences which are organized to announce the launch of its new products, for example, the Nescafe Menu. The firm’s sales force is referred to by personal selling for the purpose of building customer relationships and making sales. The salespeople who are included in the company’s marketing mix carry out the role of communicating with customers with an intention of informing them about available products and coercing them to buy the products. The organization uses its employees in the six sales offices to sell its products (Park, Ungson & Cosgrove, 2015 p.82).
According to Woodside (2010 p.1), business to business (B2B) is the best practice and technique used by a company in the production of products and services and later on sell them to other companies or businesses. B2B of Nestle Company focuses on both individual and organization buyers. The company uses business-to-business marketing to meet the demands of other businesses and companies despite some consumers driving the products offered by the company. Nescafe being a large direct sale of Nestle and other products it sells the products in bulk to other business like supermarkets and wholesalers. Furthermore, the relationship that exists between Nestle Company and other trading companies has been linked with other companies’ growth and expansion.
Business to Consumer (B2C) is the best practice and techniques used in the promotion of organizational services and products among customers. Nestle company have been practicing BC2 marketing techniques during promotions of its products. The products are promoted through road shows, websites, blogs and social media so they can create awareness provide to the public about the existing product or new products in the market.
Nestles marketing plan is aimed at examining one of the company’s product line extension focusing on both the external and internal environment. The plan also includes marketing mix, marketing strategies, marketing mix 4 P’s and competitive strategies adopted by the organization.
Purpose and Mission
The key purpose of the business plan is analyzing several elements of Nestlé’s product line extension. The brands chosen are Nescafe Menu and Bear Brand Choco with the mission of the plan being to find out how the products have met the company’s expectations before the product is launched in the market.
Situation analysis
In order to bring the products in the market, Nestle Company has applied lots of creativity and innovation on the existing production pattern. The company has further kept preferences and taste of its target group including moms and kids. Moms want healthy kids while kids prefer tasty foods. Therefore, the products are mixtures of both healthy and tasty and it creates value to the target group.
The 7 P’s marketing mix includes product, people, price, promotion, place product and physical elements. The 7ps are essential for nestle company as they help in reviewing and defining the company’s key issues affecting markets of its products.
Nestle Company has high reliance on all internal and external stakeholders. Having the best staff who have provided customer satisfaction and repetitive purchases is a key essential to why the company is offering high quality products and services.
In order to sustain the competitive market, Nestle Company has launched a product called Bear Brand Coco. The product is a healthy drink ideal for children and mothers. Despite its irresistible taste of chocolate, the product has milk goodness. Furthermore, Bear Brand Choco milk powered is fortified with resistance-building Vitamin C and Zinc that are good from maintaining body fitness and strengthening immunity. In addition, these nutrients have beneficial elements that assist in fighting fatigue and sickness. The product is also delicious, affordable and nutritious to the customers.
According to Molinari, Abratt and Dion (2008 p.363) customers will always relate the prices to quality of the product. The relation is always founded when the products are ego intensive or technology-based. Nestle company has emphasized on quality of product and it has offered reasonable and affordable prices making sure people from all income classes like middle-income, high income and low income consume the product.
Nestle company has the main focus on advertisement which is an effective considerate medium of promoting its products. The media has a wide coverage and reaches many customers within short time frames. Nestle company has recently adopted numerous promotions modes like magazines which are believed to assist in creating public awareness. During promotions period, the company uses both push and pull strategies. According to Wang and Tzeng (2012 p.5600), push strategy is as a way of using all available distribution channels in order to push the products on offer into the marketplace while pull strategies are the way an organization facilitates its direct interface with clients.
Nestle company has a high customer segmentation and its targets are to all customers from urban and rural areas. Irrespective of place, Nestle products are readily available in all the supermarkets and other outlets. The availability ‘of the products in diverse markets has enhanced customer satisfaction and repetitive purchases.
Nestlé’s product delivery is usually done with the presence of customers. Furthermore, the consumers are subjected to pay for the services delivered to them.
Nestlé’s offers some products and services that are in bulky and intangible. For all purchases, the company offers some printed materials like receipts, warranties and brochures containing information about the products
Marketing segmentation divides user markets on a basis of customer characteristics. The segmentation for Nestle Company is divided into the geographical area, demographic area, psychographic area and behavioral area. In terms of Geographic, Nestle Company has segmented its market for diverse products depending on geographic weather like warm, hot and cold. For example, in hot weathers products like Nescafe ice have generated huge sales. The Nescafe ice is consumed with ice during the warm seasons as consumer’s tries to mix the product with chilled or cold water to bring body freshness.
In terms of demographic age, Nestle Company segments its main products on generations. For example, some products like Nido, Koko Krunch, Lectogen and cerelac are segmented for children of different ages and for newborn babies (Tazrian, 2017 p.1). Nido product has been nutritious for children of 2 years and above as it contains Vitamin D and 25 minerals that assist in child’s growth (Bijaoui, 2017 p.29). Cerelac is ideal for new aged baby as it contains rise mixture and milk for babies of one year or less (Mohammed, 2014 p.1). Lacton one is segmented for children below six months and lactogen 3 for babies below one year. Furthermore, Nestle has segmented its market in terms of incomes and occupations. For example, Nestle company has introduced Nescafe classic which is an appropriate product for people who are busy in their jobs and requires freshness as it is a trend of grown-ups to need caffeine. Therefore Nescafe classic is effectively designed for them. In terms of psychographic, Nestle has satisfied lifestyles and personality of its consumers. For example, Nestle has provided Nescafe 3 in 1 to satisfy needs for people with a high engagement in activities and limited time.
Nestle company has adopted several strategies for dealing with both internal and external environments. The company has acquired domestic companies so that it can form an autonomous team of managers who are more knowledgeable about local markets cultures than Europeans and Americans. Furthermore, the company has also adopted a wide-area strategy in Asia continent for producing diverse products in each country and later on supplying the regions with assigned products from one nation. For example, the company produces soybean flour in Singapore, cereal in the Philippines, soymilk in Indonesia, candy in Malaysia, coffee creamers in Thailand, all for regional distribution. Nestle company has also adopted another strategy of collaborating with other large companies with high market shares and brand loyalty. The strategy has recently been successful for the company. For example, Nestle Company collaborated with Coca-Cola in the early 1990s in ready-to-drink coffees and teas so that it can expertise in prepared beverages and gain huge benefits from coca cola worldwide bottling system. The company also recruits staff locally who are well equipped with knowledge, skills and understanding of business procedures and local culture. The strategy has been an effective way of responding significantly to conditions imposed on local demand hence increasing profit margins and organizational market share.
Marketing does not generally deal with selling alone but rather deals with other specialized activities of the entire business. Consequently, marketing is basically the entirety of the business when viewed from the final results point of view which is also the point of view of the customer. In addition, marketing responsibility and concern should permeate all the areas of the organization. The department involved with marketing needs to work closely with operations management/production function in ensuring that there is adequate development and research for the satisfaction of future and current customers’ needs. The marketing department also works with the finance department in ensuring that adequate budget has been set aside for distribution, promotion and research. Furthermore, the marketing department works with the human resource management department to make sure that appropriate staffing and skills levels have been put in place to create a competent and ambitious sales team, meet product target and develop and research new ideas of products.
The main strategy used by Nestle company for business development involves entering the emerging markets in an early stage in order to establish brand trust and a good network before the competitors bomb into the market with product differentiations. Furthermore, the company buys a local brand name that is popular with the people and customers are accustomed to it. This strategy assists in overcoming cultural barriers as in some regions customer’s resentments foreign brands. In addition, Nestles’ strategy establishes an environment which is biased and then expands into more niches and therefore market experiences rise in demands. Other strategies that have been adopted by the company include expatriate army and forming SBU’s. In terms of expatriate army strategy, Nestle Company has established a group consisting of many managers who have many years of experience in conducting management activities in foreign activities. The managers are highly trained and educated in order to be able to sustain in worldwide field of operations. Forming of SBU’s has also formulated effective strategic decisions globally as each of the SBU’s has a focus on a specific segment including infant foods, coffee, cereals and chocolates.
Conclusion
Nestle company has an opportunity of generating high profits from its distinctive competencies like quality, customer responsiveness, innovations and brand loyalty. Nestlé’s use of the best marketing strategies has created a lot of advantages that have led to the satisfaction of customers in Malaysia by integrating various performance objectives including fair price, flexibility, dependability, speed and quality. The pestle analysis has shown that the company has maintained its marketing strategies in the country which has led to brand loyalty showcased by customer’s repeat purchases. Essentially, Nestle has made its brand available in various outlets that have resulted in customer satisfaction through a good packaging style, affordable price of its products and attractive brand image. The Nestle Company should consider examining both internal and external environment before launching its product to the market.
References
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Bijaoui, I., 2017. Economic Involvement of International Organizations, MNCs and Local Business Leaders and Groups. In Multinational Interest & Development in Africa (pp. 29-65). Palgrave Macmillan, Cham.
Köse, Y. (2007). Nestlé: A Brief History of the Marketing Strategies of the First Multinational Company in the Ottoman Empire. Journal of Macromarketing. 1st ed. United States: SAGE Publications, pp.74-85.
Mohammed, S.G.S., 2014. Infants feeding and weaning practices among mothers in northern kordofan state, Sudan. European Scientific Journal, ESJ, 10(24).
Molinari, L.K., Abratt, R. and Dion, P., 2008. Satisfaction, quality and value, and effects on repurchase and positive word-of-mouth behavioral intentions in a B2B services context. Journal of Services Marketing. 5th ed. Uk: Emerald Group Publishing Limited pp.363-373.
Park, S.H., Ungson, G.R. and Cosgrove, A., 2015. Defining the Drivers of Profitable Growth. In Scaling the Tail: Managing Profitable Growth in Emerging Markets (pp. 67-90). Palgrave Pivot, New York.
Payaud, M. A. (2014). Marketing strategies at the bottom of the pyramid: Examples from Nestlé, Danone, and Procter & Gamble. Global Business and Organizational Excellence. 2nd ed. United States: John Wiley & Sons, pp.51-63.
Tazrian, N., 2017. Observation on launching procedure of Nestlé Fruita Vitals. U.S. A: Elsevier publishing company
Varma, G.R. and Ravi, J., (2017). Strategic Analysis on FMCG Goods: A Case Study on Nestle. International Journal of Research in Management Studies. 2nd ed. United States: SAGE Publications pp.12-22
Wang, Y.L. and Tzeng, G.H., 2012. Brand marketing for creating brand value based on a MCDM model combining DEMATEL with ANP and VIKOR methods. Expert Systems with Applications.5th ed. Germany: Springer, pp.5600-5615.
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