REVIEW OF LITERATURE

MARKETING STRATEGY OF NESTLE COMPANY

1. Henri Nestle a German-born Swiss confectioner founder of
Nestle company –

Nestlé was formed in 1905 by the merger of the Anglo-Swiss Milk

Company, established in 1866 by brothers George and Charles
Page and Henri Nestle founded in 1866 by Henri Nestlé The
company grew significantly during the First World War and again
following the Second World War, expanding its offerings beyond
its early condensed milk and infant formula products. The
company has made a number of corporate acquisitions, including
Crosse & Blackwell in 1950, Findus in 1963, Libby's in 1971,
Rowntree Mackintosh in 1988, and Gerber in 2007. Nestlé's
products include baby food, medical food, bottled water, breakfast
cereals, coffee and tea, confectionery, dairy products, ice cream,
frozen food, pet foods, and snacks. Twenty-nine of Nestlé's brands
have annual sales of over CHF1 billion (about US$1.1 billion),
including Nespresso, , KitKat Nescafe, Smarties, Nesquik,
Stouffer's, Vittel, and Maggi. Nestlé has 447 factories, operates in
189 countries, and employs around 339,000 people.

2. Segmentation, targeting, positioning in the Marketing strategy

of Nestle -

Nestle juices is worldwide number one and fastest growing food

company. The company is trying their level best to differentiate
themselves from other local companies and trying to win the
competition in juice industry. Nestle company uses demographic,
geographic & behavioural segmentation strategies to cater to the
changing needs of the most competitive industry . Differentiated
targeting strategy is what helping the company in targeting the
homogeneous set of customers (i.e. customers with similar needs)
with their bundle of products. It uses a mix of value-based &
product based positioning strategies depending upon the kind of
product they are branding & the market in which it is selling the
products. Many customers have different requirements and it
hardly chance to satisfy all customers by treating them same just
like. Market segmentation is the searching of part of the market
that are not similar from other.
Segmentation provides the firm to good satisfy the needs of its
major customers.
 Clearer understanding of the requirements and needs of select
ed customer groups.
 More effective positioning in this place.
 Greater precision in selecting promotional Transportation
vehicles and techniques.
Targeting -

Deciding a targeting strategy is the next step from carrying out

segmentation. Where segmentation segments the complete market,
targeting only observes the individual segment. Targeting
then makes plans to get customers within that segment. In essence,
targeting is a subset of segmentation. A basic example of targeting
strategy is when a company segments a market based on
demography. For example – Sam and Johnny wants a demographic
audience of kids and mothers. Targeting strategy will then target
moms and kids who can afford Sam and Johnny brand and areas
where the presence of residential families is higher.

Positioning Strategy -
By creating product, service, channel, people and image differenti
ation Nestle arrives the consumer touch point more easily,
effectively & efficiently in comparing with other competitors in
the highly competitive food processing market.
3.Marketing mix of Nestle –
The Marketing mix of Nestle discusses the 4P’s of one of the
strongest FMCG companies of the world. The Nestle marketing
mix shows Nestle has a strong product line which boosts its
marketing mix. Below are the products, price, placement and
promotions of Nestle.
Understanding 4Ps of Marketing Mix of Nestle

Marketing Mix of Nestle analyses the 4Ps of Marketing Mix of

Nestle (Product, Price, Place, and Promotion). The article talks
about the impact of its Product, Price, Place and Promotional
strategies on the performance of the company.

1.PRODUCT - PRODUCT MIX OF NESTLE.

Nestle offers a wide range of products and has a strong depth and
width of the products. There are different products that Nestle
offers in different countries and the decision to sell which product
in what country is based on the Demographic factors, Production
costs, Demand fluctuation, and competition

Dairy Products: There are different Dairy products which Nestle

has launched in the market which include Nestle Milk, Nestle
Slim, and Nestle Everyday

Chocolates and Confectionaries: Nestle KITKAT, Munch,

Polo, Milky bar, Crunch, Smarties etc are few products which
Nestle offers under Chocolates and Confectionaries.
Coffee: Nescafe, Nescafe Dolce, Nespresso, Nescafe Cappuccino
etc are few product offerings under the coffee category

Ready to Cook or Culinary, Chilled and Frozen foods:

NESTLE KIKAT, MAGGI, JACKS, HERTA and etc are few
Culinary, Chilled and frozen foods that nestle offers to its
customers

There are different products which enjoy leader position for

different product categories and have 2-3 products as cash cows
in their product mix.

2.PRICE: PRICING STRATEGY OF CADBURY

There are different pricing strategies that Nestle uses for its
products and its variants.

Competitive Pricing: Majority of the products offered by Nestle

are provided at competitive pricing. Nestle Maggi, Nestle KitKat,
etc are offered at competitive prices in the market

Skimming Pricing: Products like Nestle A+ Slim, Nestle A+

Toned, Nescafe Coffee etc are few products which are offered are
a price higher than their competitors. These products are targetted
towards individuals who are health conscious and fitness
enthusiasts and for that reason are priced dearer price.

3.PLACE -

Nestle products of the available all over the world. Due to its
robust distribution channel, Nestle has been able to make a huge
impact in the global market. The company has made sure that
their products are available all over the world and the carter to a
huge customer base.

The products are available both in the urban and rural areas. We
find that this has helped in a way for the company. The places of
distribution have made the products available to a lot of
customers and the, in turn, has generated a profit for the company
both in terms of customer base and the revenue. Nestle is a
worldwide name and has made its name in almost more than 200
countries. This shows the distribution channel and the places
where it has made its product reach. This gives an overview of the
place and distribution strategy in the marketing mix of Nestle.

4.PROMOTION - PROMOTION MIX OF CADBURY

Promotion plays an important role in the marketing mix of Nestle,

the company uses a proper mix of ATL, BTL and Digital
channels for creating awareness and promoting their products.

It is the strong product portfolio that makes it different from its

competitors. Nestle uses all media like TV, hoardings, print,
online ads etc for its promotion.

Nestle has a strong social presence will also allow it to interact

and engage with its customers and get better insights about their
products and other services.

The brand also relies heavily on BTL promotion and uses

Vernacular communication for promoting themselves in different
states and regions. The aim to use vernacular language and
regional dialects is to connect and engage with the audience in a
much better way.

4.Nestle’s Mission & Vision

Corporate Mission –

At Nestlé, we believe that research can help us make better food

so that people live a better life. As consumers continue to make
choices regarding foods and beverages they consume, Nestlé helps
provide selections for all individual taste and lifestyle preferences.
Research is a key part of our heritage at Nestlé and an essential
element of our future. We know there is still much to discover
about health, wellness and the role of food in our lives, and we
continue to search for answers to bring consumers Good Food for
Good Life.

Corporate Vision –

Nestlé has an aim to meet the various needs of the consumer every
day by marketing and selling food of a consistently high quality.
Good Food is the primary source of Good Health throughout life.
We strive to bring consumers foods that are safe, of high quality
and provide optimal nutrition to meet physiological needs. In
addition to Nutrition, Health and Wellness, Nestlé products bring
consumers the vital ingredients of taste and pleasure. Confidence
that consumers have in our respected brands, is a result of
our company many years of knowledge in marketing, research and
development, as well as continuity consumers relate to this and
feel they can trust our products. The objectives are to deliver the
very best quality in everything we do, from primary produce,
choice of suppliers and transport, to recipes and packaging
materials.

5.SWOT analysis of Nestle –

Nestle is one of the strongest companies in the world when it

comes to the FMCG market. Nestle coffee is almost a cash cow
for Nestle and so is MAGGI There are many brands in Nestle
which are super hit.

Strengths in the SWOT analysis of Nestle -

World Renowned brand- It is fortune 500 Company and is world’s
largest food company measured by revenues (2014). Nestle does
individual branding of their different food brands which help them
in creating awareness about their various food brands. This also
helps them because if a brand like Maggi is affected, it does not
affect the sale of Coffee. Extensive distribution system- With its
diversified product portfolio Nestle has been successful in
penetrating Urban as well as rural markets. Locally adapted
distribution methods & decentralization in supply chain, including
street markets, mobile street vendors, door-to-door distributors &
Medical outlets has helped the company in making its products
visible in the market.

Weaknesses in the SWOT analysis of Nestle –

Maggi Controversy – In India, Maggi was recently banned because
it was found to contain additives which were harmful. This affected
the brand name of Nestle as well as Maggi big time. However, it
has been relaunched recently and Nestle is trying to convince
people about the quality of Maggi. Brand structure: It has many
brands under the same umbrella group so managing such large
number of individual brands can create conflict of interest Legal &
consumer issues: Although Nestle is global food giant but it got into
controversies over the years like Nestle baby formula boycott child
by suppliers, Chocolate price fixing etc. which resulted in negative
word of mouth.

Opportunities in the SWOT analysis of Nestle –

Healthy breakfast – Maggi oats or other such healthy breakfast
alternatives have a big time future as most breakfast alternatives are
heavy and people are becoming more health conscious. Nestle
needs to do more market penetration with regards to its Cereals.
Expanding market: By entering into other markets & penetrating
more & more in the rural markets through its robust supply chain
and transition of spots of unorganized business to organized one
will lead to further expansion of the company’s business.
Increasing Income levels: Due to stable political scenario,
improved literacy rate & controlled inflation, disposable income of
the people is increasing there by resulting into upsurge in demand
& changing their lifestyle.

Threats in the Marketing strategy of Nestle –

Competition in the market: With increasing number of local &
national players it’s becoming very hard for the companies to
differentiate themselves from others. There is also threat from
counterfeit products destroying its brand image in the market. Price
of commodities: Increasing price of commodities will result in
further increase in the price. Further increase in price will result in
decrease in sales, margins & brand switching. Buyers power: With
highly diversified consumer goods market where there are lots of
brands claiming different sorts of benefits, it’s very difficult for
consumers to stick to a particular brand & hence results into brand
switching.
6. Nestle a company built on brands –
The Nestle brand portfolio covers practically all food and beverage
categories: milk and dairy products, nutrition (infant, healthcare,
performance and weight management), ice cream, breakfast cereals,
coffee and beverages, culinary products (prepared dishes, cooking
aids, sauces etc.), chocolate and confectionery, bottled water. Many
brands have category leadership, both globally and in local markets.
Many have existed for several decades. Some like the mineral water
from Italy – and Nestle in Brazil, are well over 100 years old. The
best-known global brands include Nescafé, Nestea, Maggi, Purina
and of course Nestlé itself. Other brands also sell in many countries
– for example, Milo, Nesquik, Nespresso, Kit Kat, Smarties, Polo,
Friskies, Perrier and Vittel. The total number of brands – including
local brands – reaches into several thousands.

7.Nestle Nutrition a specialist nutrition business –

Nestlé is well-known for its wide range of everyday brands such as
Nescafé and Maggi and its confectionery, ice cream and bottled
water brands. But there’s another side to Nestlé that is less well-
known. This is its work with the medical community, and the range
of specialist products that are marketed by Nestlé Nutrition, a stand-
alone organisation within the Nestle Group. Nestle Nutrition
develops science-based nutrition products and services that enhance
the quality of life for people with specific nutritional needs. With
its focus on core nutrition, it is closer to pharmaceuticals than
mainstream Nestlé food and beverage products. While taste is
important, the key driver for Nestlé Nutrition more specialist
products is to provide appropriate nutrition to address specific
problems at all stages of life. Nestle Nutrition covers Infant
Nutrition, HealthCare Nutrition and Performance Nutrition. The
acquisition of the Jenny Craig business in the US has added a fourth
nutritional area weight management. HealthCare Nutrition Nestle
Nutrition N Balance with BG-3 is scientifically formulated to
provide diabetes sufferers with better control of the level of glucose
in their blood after a meal – and to delay hunger and reduce
cholesterol. Nestle Nutrition is a stand-alone organisation within
the Nestle Group. It operates in more than 100 countries. Of its
10,500 employees, some 3,000 are trained medical delegates. They
work closely with health care professionals such as doctors, nurses
and dietitians to provide them with relevant information as well as
products and services to help their patients.

8. How Nestle runs its business –

Nestlé is a Swiss company Several Swiss characteristics are
noticeable in the way we run our business. Our organisation is
effective, reliable, hardworking and pragmatic. But Nestle is also a
very human company. Above all, we care about our people. We are
committed to creating value over the long term not only for our
shareholders, but also for all those communities around the world
where we market our products.
PRINCIPLES OF NESTLE -Two fundamental documents (The
Nestlé Corporate Business Principles and the Nestlé Management
and Leadership Principles) lay down principles that permeate the
whole Nestlé Group. They govern our policies and strategies. They
set the tone and style for our approach. They affect everyone who
works at Nestlé. They also impact everyone with whom we do
business. In effect, they form ‘a code of conduct’ which is lived out
by each one of us at Nestle. The Nestle Corporate Business
Principles outline the Nestle way of doing business. They include
sections on Infant Health and Nutrition, Human Rights, Child
Labour and the Protection of the Environment, as well as a set of
Consumer Communication Principles. They include all ten
principles of the United Nations Global Compact, as well as the
International WHO Code of Marketing of Breast-milk substitutes.