About Nestle

Discuss about the Marketing Strategy of nestle.

Nestle is one of the most popular brands in the market.  Nestle was founded by Henri Nestle in 1866 in Switzerland.  The company is situated in a number of domestic and international markets. In the company, more than 8000 employees are involved in conducting the activities.  The organization focuses on the product development so that the commitment of the customers can be maximized.  Nestle is known as the leader in the food processing and also in the consumer goods industry.  The organization has specialization in many products like baby products, ice cream, and drinks. The company focuses on its customers so that proper relationships can be maintained. 

Nestle was established in 1905 resulted in the merger of Anglo-Swiss milk company. In the terms of revenue, Nestle has been one of the biggest companies in the world.  Nestle operates 447 production units serving in 194 countries. Nestle means little that symbolizes safety, family, and symbol of care. The success of the company is due to the innovative products and now the company is one of the biggest food leading industries.  The company also produces more than 300 products like Maggi, Nescafe, and kit Kat. The products of the company are sold globally (Nestle, 2013).

Political factors

It is evaluated that the organization is conducting the activities in diversified communities and there are many changes in rules and regulations that are faced at the time of conducting the activities.  There are many products that are offered by the organization but due to different reasons, the products are not allowed in various countries.  The organization has shown stability in many economies including China and India. Nestle has to follow various political changes in the developing countries so that the activities can be conducted smoothly. Moreover, Nestle activities are affected by the risk that arises due to the government instability.

Economic factors

Nestle has maintained a network of research and development and also innovative products are introduced in the market.  Due to changes in economic policies of different countries the organization has to face problems in supplying its products to the consumers. It is evaluated that the customers are also aware of the change in inflation and economic growth. Due to the change in economic policies the company set various target segments. To take a decision related to price is an important factor by taking into consideration inflation rate and buying power. In promoting the economic worth of the farmers the company is giving focus on contributing so that the satisfaction level of the consumers can be enhanced (Rezaeegiglo, Sadouni, Aref, Khotbesara and Eslam, 2014).

History

Social factors

The activities of the organization are influenced by the share thoughts and beliefs of the consumers. The culture and lifestyle of the people induce company to offer a specific product to the right segment.  Nestle has also taken into consideration social perspective.  The organization has considered the concept that customer changing attitude plays a major role in conducting the activities of the organization.  Now a day’s people are more aware of their health and only take into consideration those products that are beneficial for their health. The company has made a good reputation for analyzing the behavior of the customers.  Nestle is a global brand but the production of the product is done locally so that the quality can be maintained (Turlais, 2016).

Technological factors

Technology offers various opportunities to the company so that the new products can be developed in an effective manner.  Nestle take into consideration technology in conducting many operations of the organization like to maintain proper databases by considering software. Social media has also lessened the gap between the customers and the company.  Nestle considers the state of art technology for producing various products to attain the standards globally (Ion, 2015).

Legal factors

Nestle has to face the labor laws related to minimum wages that are fixed by taking into consideration provision of laws.  It is evaluated that the company has to follow promotion laws as it is the asset of the organization.   Nestle has to follow the foreign trade regulations so that the products can be sent to other countries.  This law helps to offer food and beverages to the customers at international and domestic level by taking into consideration rules and regulations of the transportation products.  Nestle need to follow the global regulations so that the changes can be made in the international markets.  It is seen that many countries try to make changes in the activities so that the products can be delivered to the customers within the rules and regulations (Appiah-Adu and Amoako, 2016).

Environmental factors

In the recent scenario, the main focus is to have a clean environment.  So nestle should take into consideration rules and regulations to produce healthy food with environment-friendly activities.  There are many countries that set different rules so that the acceptance of the products can be enhanced.  Nestle is focusing towards social contribution so that the issues related to packaging and recycling can be resolved effectively.

Products

Threat of New Entrants – Low

In the consumer food industry, the threat of new entrants is low. The players who exist in the market hold a large share of the market.  They take into consideration the needs and wants of the customers so that they can sustain in the competitive market.  It is seen that every year many new entrants enter the industry so that the large market share can be grabbed.  Nestle has attained a good image in the market but as the food industry is considered it is seen that there are many companies who entered the market.  Nestle gives a tough challenge to the new entrants so that the quality can be maintained and also the large share can be attained by the company (Cowherd and Levine, 2012).

Competitive Rivalry – High

Nestle conduct the activities in the consumer food industry and faces a high level of competition.  It is seen that the competitors of the company are kraft foods and P&G. The products that are taken in breakfast segment have the competitor like Kellogg’s.  So Nestle is the largest player in the industry and still face a high level of competition in this industry.   To compete in the high level of competition the company spends a huge amount on marketing the products.  The competition is not only related to price but also with the variants available in products, promotional offers, and creativity.  All the competitors who are prevailing in the market have to strive so that they can retain their large market share. So, the competitive rivalry of the company is high (Park, Ungson and Cosgrove, 2015).

Bargaining Power of Suppliers – Low

The company holds a large market share in the industry.  So it requires large suppliers to attain high quantities. It is evaluated that if any supplier starts the process of supplying they never bargain with the prices.  Nestle focuses on suppliers so that proper relation can be maintained for a long time.  The company prefers to maintain proper relations with the suppliers so to attain a good quality of raw materials. The company takes care of the suppliers so that products can be easily offered to the customers.

Bargaining Power of Buyers – High

Just because of a high level of competition the bargaining power of the buyers is high. The buyers can easily switch from one brand to another.  It is essential to focus on the prices of the products so that the customers can be retained for a long time.  The cost of switching is low for the customers.   The customers have many choices to select from a range of products and there are many companies who sell similar products. The company focuses on enhancing the high satisfaction level of the customers (Wooldridge and Floyd, 2013).

Global Operations

Threat of substitutes – High

There are many Nestle products like a packaged water bottle and pasteurized milk that have substitutes available.  As the company offers daily products so the threat of substitute is high.  Nestle has to take into consideration innovative ideas to sustain in the competitive market. In the food industry, the market share is so large so the substitute is available easily for the consumers. There are many allegations against the products of the company as it is not healthy for consumption.  This has given negative impact on the image of the company and the sale of a substitute product has enhanced.  The company strives to highlight the aspect of the products so that substitute’s products can be handled (Williams and Figueiredo, 2014). For example: The substitute of the Maggi is Knorr noodles.

Innovative Medium of Communication and use of viral marketing as a communication strategy

Nestle should be elaborative so that the effect of viral marketing can be done in a particular locality.  To attract the human minds the company should organize game stalls and food stalls.  Communication should be done in regional languages in a form of game shows and movies.  This will give impact on the interest of the rural population.  Distribution of test samples should be also done so that the marketer can collect valuable consumer insights (Dhanesh and Sriramesh, 2017).   For proper management, the company should communicate effectively with the employees of the organization so that the activities can be conducted effectively.

Focus should be given to value creation and branding rather than only on prices and offers

 The activities of the company should be directed towards creating sustainable brand value by communicating and creating good brand value so that the promise can be fulfilled that are made to the customers.  The emphasis should be given on increasing the value creation so that the activities that are conducted can attain profitability and growth.  The brand image should also be considered by giving emphasis on the value creation for customers.  The company should give emphasis on generating brand recall amongst the customer base.  If there is proper communication the company can easily create a positive environment that will help to sustain in the competitive environment.

Offer value for money – Customer Centric

Nestle has many reasons to attain success like good supply chain management process and proper conducting the activities.  The company can easily attain success by being customer-centric. Consumers purchase the product of the company because they have faith in its quality and they know that the company offers value for money.  It is important for the company to keep faith alive in the customers so that the demand can be enhanced (Avittathur and Jayaram, 2016). 

Dealing with Challenges and Regulations

Social activities

Nestle should engage with the customers by taking into consideration social platforms so that the online behavior can be accessed of the consumers. The company should also consider predictive analysis so that the customers can be targeted easily (Hofstede, 2011).

Conclusion

So, by analyzing the report it is concluded that the company has various competitors in the market. To sustain in the market it is important to have proper communication with the customers so that the sales can be enhanced effectively.  The current market environment of the company is emphasizing on providing quality products to the customers.  

Nestle is giving emphasis on rapid expansion and also targeted India as its focused market. This strategy will assist the company to grow in the market. Nestle also gives emphasis on promoting advertisements so that the overall goals and objectives can be accomplished. By launching new products in the market it is evaluated that the company also give attractive advertisements so that the activities can be conducted smoothly.  The company should give emphasis on value creation for consumers so that the image can be maintained.  Value of money should also be developed of products and services rather than offering cheap products or services.

It can be said that in the current ecosystem, Nestle is behaving like a leader and moving forward with a calculative strategy to track the macro environmental forces.  Nestle should also give emphasis on taking into consideration attractive promotional techniques so that the product knowledge can be given to the consumers

References

Appiah-Adu, K., & Amoako, G. K. (2016). The execution of marketing strategies in a developing economy: A case study of selected market leaders. African Journal of Economic and Management Studies, 7(1), 9-29.

Avittathur, B., & Jayaram, J. (2016). Supply chain management in emerging economies. Decision, 43(2), 117-124.

Cowherd, D. M., & Levine, D. I. (2012 ). Product quality and pay equity between lower-level employees and top management: An investigation of distributive justice theory. Administrative Science Quarterly, 302-320.

Dhanesh, G. S., & Sriramesh, K. (2017). Culture and Crisis Communication: Nestle India’s Maggi Noodles Case. Journal of International Management.

Hofstede, G. (2011). Cultural dimensions in management and planning. Asia Pacific journal of management, 1(2), 81-99.

Ion, B. (2015). Multinational Companies-Main Players In The Globalization Economy. Ovidius University Annals, Series Economic Sciences, 15(1).

Nestle, M. (2013). Food politics: How the food industry influences nutrition and health (Vol. 3). Univ of California Press.

Park, S. H., Ungson, G. R., & Cosgrove, A. (2015). Scaling the Tail: Managing Profitable Growth in Emerging Markets. Springer.

Rezaeegiglo, R., Sadouni, A., Aref, F., Khotbesara, P., & Eslam, N. (2014). Review and Rating factors affecting the Deployment of (CRM) Customer Relationship Management at Nestle Company. International Journal of Academic Research in Business and Social Sciences, 4(1), 539.

Turlais, V. (2016). BUSINESS SCENARIO PLANNING FOR DECLINING INDUSTRY. Journal of Business Management, (11).

Williams, B., & Figueiredo, J. (2014). Lessons from an innovation-leader and tools to learn them. Journal of Industrial Engineering and Management, 7(4), 932.

Wooldridge, B., & Floyd, S. W. (2013). The strategy process, middle management involvement, and organizational performance. Strategic management journal, 11(3), 231-241