1Overview “Good Food, Good Life”– Nestlé is today world’s leading health, nutrition and wellness company. Nestlé’s mission is to provide the besttasting and nutritious choices in extensive range of beverages and foodcategories to its consumers all over the world. Today Nestle has 67 brands ofbottled water, produced in 36 countries and its distribution is made in 130countries worldwide. Nestle traces itsorigin back in 1866 when Anglo-Swiss Condensed Milk Company opened the firstEuropean condensed milk factory in Cham, Switzerland.
One year later, a trainedpharmacist, Henri Nestle, introduced world’s first prepared cereals for infantsin ‘Farine lactee’ in Switzerland. Both of these companies merged in 1905 to bea company known as Nestle with headquarters based in Swiss town of Vevey –where it started in the beginning. Nestlé’s firstcustomer was a premature infant who was unable to tolerate his mother’s milk aswell as any other conventional substitutes. Henri’s effort was to develop analternative source of infant nutrition for mothers who were unable to breastfeed. Thus the cereal was prepared with his experiments on various combinationsof cow’s milk, wheat flour and sugar 1.2VisionNestle’s aim is to meetthe various needs of the consumer everyday by marketing and selling foodof always high quality.
MissionIt try to bring consumer foods that are safe of high quality andprovide best nutrient to meetphysiological needs. Nestle helps provide options for all individual taste and lifestylepreferences.Objectives1.
To become a leader in wellness, healthand nutrition.2. To be trusted by the company stakeholders.3. Tobecome the reference for performance in finance within the food industry.
4. The company Seeks to promote leadership.5. To achieve trust simply by satisfyingall the consumer expectations.6.
The company believes in the creation of sutainablevalues that are long term. StrategiesThe business objective of nestle companyis manufacture and then markets its product in a manner that ensure thecreation of value that the company can carry on for a long term for theemployees, partners, consumers and shareholder. The company is conscious of thefact that success of the organization is a clear reflection of theprofessionalism.
1.3 Current status· Nestle is one of the most fast growingcompany· The company moved from being atechnology led company that produced convenient, tasty foods and beverages forsustenance, to being a science driven, nutrition, health and wellness company.1.4Future orientationThe future for Nestle’s R is confidentlyset on the path of Nutrition, Health and Wellness.
The innovations and product repairs of the coming years will be driven bynutrition that is personalized to better meet the needs to our consumers. Theseneeds may be defined by our genes, the metabolites that our body creates or bythe way the brain notices food. At the same time Nestlé R is committed tocontinuous improvement in consumer insights, and translating these intoinnovative products and wrapping to meet consumer needs and likings. 2. Situational analysisNestle is one of the strongest companiesin the world when it comes to the FMCG market. Nestle coffee is almost a cashcow for Nestle and so is Maggi!! There are many brands in Nestle which are ofgreat success. 2.
1Market overviewNestle is the leader in food andbeverage industry with wide range of products which accompany consumers live from birth through adulthood, frombreakfast to dinner, at home and elsewhere. This day by day represents them asa great responsibility and commitment to quality, taste and nutrition acrossall their products, to touch lives in a positive way and earn customer’s trust.They have joined into nutrition, healthand wellness strategy with three fundamental beliefs:Pleasure and health: Nutrition havegreat taste if it is a part of healthy balanced diet. Eating with moderationand balance: Nestle products are deignedto a variety of choices for every moment of the day and for all companymembers.
With long term commitment is to enablecustomer an informed choices about diets and lifestyles, helping them care forthemselves and their families, nestle is really a leader in nutrition, healthand wellness area. 2.2Competitive situation1. Leadingoverall market position and number one or two brands in most areas.2. Theextraordinarily large cope of nestle’s business provides for significanteconomies of scale in manufacturing, marketing and administration.3. TheR capabilities allow the company to lead the way in innovation andprovides for maximum portfolio flexibility.
CompetitorsFoodand beverage: P, Mars, Danone, Kraft, ConAgra foods, Sara Lee, UnileverCommercialproducts and pharmaceuticals: Johnson & Johnson, Novartis, Bayer, PRegionaland local Manufacturers: China Yurun Food, Nissan Foods, Indofood Agril 2.3Micro and macro environmental factorsThe macro environment of Nestle includethree division:a. PoliticalfactorsItserves in several countries. The rules set by government is different indifferent regions. It should focu on political dynamic like taxation, importexcise duties, government permission to enter the target marget. It should also consider the changing globalregulation which are yet to adapt by the company.b.
EconomicfactorsEconomiesof countries differs everywhere, so it has to set different economic policiesfor different targeted markets. It should made an analysis report on frequentbasis to get the knowledge of the inflation rates and different income levels. c. SocialfactorsTheculture , lifestyle , norms and values force nestle to deliver the specificproduct to the right segment. It has considered the social perpective well o far. Nestle has madea good reputation of understanding and evaluating the consumer behavior and therelated dynamic. d. TechnologicalfactorTechnologygives many chances for the development of new products or improvement ofexisting ones.
Nestle uses technology in different business operations like tomaintain databases with the help of software. The frequent use of social sitehas lowered the gap between the direct interaction of consumer and company. 2.
4 SWOTStrengthØ Ithas experience of more than 140 years in the industry.Ø Itis one of the world’s biggest brand.Ø Ishas reached globally Ø Employeestrength are worldwideØ Ithas largest research and development network facilitating continuousinnovation.
Ø Ithas a strong supply chain network and products are available through groceries,supermarkets and even online worldwide.Ø C.S.Ractivities for rural development, environment protection, water conservation,etc.Ø Strongmarketing and advertising through TVs, print media, online etc.Ø Ithas high brand loyality.
Weaknesses Ø Beinga big global brand, many controversies in different countries of operation caueissueØ Strongcompetition by other brands mean limited market hare growth for nestle Opportunities Ø Itneeds to introduce more health based food products to tap the healthconsciousness amongst consumer.Ø Itshould continue with acquisitions and joint ventures to increase its marketshareØ Itshould also focus on rural marketsThreatsØ Failureof the complex supply chain at low levels can affect the businessØ Increasein cost of raw materials can affect profit marginØ Solidcompetition in all product segment. 3. Marketingstrategy3.1ObjectivesNestledoes the inquiry of the products and it also helps to execute different studiesabout its products. The brand is workinghard to know the eating trends of people and the demand of the food items which people like to eatreadily.
The company is spreading its business in almost all the areas aroundthe world and its business is getting attention of everyone. 3.2STP strategiesa. MarketingSegmentationThemarket is looking for the basic food trendency among the people and Nestle is providing itsfood products to the customers relating to different segments of society. Asthe food items are cheap so they can be available to people of all levels andthese are also available with great ease. The food brand keeps in mind thevarious units of people and their needs before introducing of their foodproducts. b. TargetmarketingNestleis expanding its market in various areas of the world and these food items areprovided in different variety.
The company is looking for new market includingthe under develop areas, where these food products can be made availablethrough their effective and quick distribution channels. The food brand isproviding its food products in the target market and it needs to meet thedemands of the customers. c. ProductDifferentiation & PositioningNestlehas prepared its food products in large range, in which juices, yogurt, milk, butterand other food items are included. The products of this brand have greatessence and they are getting popularamong its customers. Nestle is the market leader in the food products and thequality of the food products is different and wonderful. The food brand has unequalledposition and the good quality food items or ingredients are used to make thesefood products, which can have long counter life and they can be used for longer time andthese can also be saved. 3.
3 Marketingmixa. Product• It is theworld’s largest food and nutrition company almost six thousand products arebeing hosted under the brand named Nestle. • Its products are very wide spreadin range counting almost all daily use products as well as occasionally usedproducts. The products includes coffee,bottled water, cereals, pharmaceutical products like lens care solutions,infant food, beverages, chocolates, candies, ice creams, refrigerated foods, yogurt, milk cream a veryunusual product that is pet food and the largest selling brand milkman. Allthese categories are subheaded to the different choices of clients including various sizes and flavors.• Products that are launched in themarket are at first screened throughhigh profile investigation and development sector including food processing,micro analytical research and proper delivery of functionalities in the foodproducts thus promising the healthy goods for clients.• Raw material for its milkproducts are UHT treated and packed in tetra packaging, moreover the packagingis long lasting as well as tempting.• As hygiene is a basic ethicalquestion for edible products, so Nestle has a full concern and focus on thisparameter.
• Nestle provides the productcompliance to the customers including all legal supports.• Nutrition quality is preferablydetermined and is provided on the packing of the product to facilitateconsumers to check their preferences along with the expiry dates.• Complaints if any are timelyresponded and suggestions are always welcomed. b. Price• Affordable prices are the major factorof success of Nestle in global markets for example Milkpak being the largestselling brand is being sold out at the same price as that of other low qualityproducts while maintaining its quality.• Their marketing strategy includes awide range of pricing strategy, and by doing this they can maintain their productrates at a sustainable position.
• Prices are flexible to almost alltypes of consumers as they have wide range of single product as in the case ofbeverages, fruit juices are flexible to low economy class and expensive tinpacked beverages are also doing business in the market.• Bulk purchase discount is also providedat the wholesale markets as well as at the stores.• Price variations are also seen,especially in the case of chocolate products, either by upsizing at the sameprice or reducing the sale price. c. Place• The products have their main business area inEurope from where they get almost 90 percent of the sales and revenues.• Nestle is running globally, its setupbeing run in 86 countries. So, the sales are also done globally and are impulsiveones.• The products are not directly throwninto the market, rather a full procedure is followed including all theessentials from Manufacturer, Distributor, Wholesaler, Retailer and finally toConsumer.
• Nestle products are available in allits variety at the maximum outlets, as the company is always looking forward toexpand its outlets. d. Promotion• Promotion strategies of the companyare very well planned and they always pay multiples of the expected amounts.• Advertising on electronic and printmedia along with sign boards having tempting figurations of the brand alwaysproves good for the brand• Sometimes limited economy offers boostup the popularity of brand especially in the case when new induction to themarket is made. 4. Action program Actionplans will help Nestlé achieve its short-term objectives by setting specificfunctional tactics, their time frame for completion, and assigning the tacticsto individuals or departments to establish accountability. Functional tacticsare the activities that must be completed to realize the short-term goal. Thefollowing points shows what Nestlesaction plan for increased organic growth and product development may look like.
i. Marketing-Increase ads by 5% before June andanother 5% before September -Provide five weekly online andnewspaper coupons, rotate the coupons between the top 10 demanded products-identify target markets and design adsdirectly for these groups -identify how target market receivesadvertisements and them place them online, in a newspaper, in the mail or textthem weekly ii. Finance -createsales forecast -monitor budget monthly to ensure Nestle stayswithin guidelines -prepare written reports for managementmonthly, detailing items that exceed or fall below budget requirements -investigate discrepancies -createbudget for production -monitormonthly spending to ensure Nestle stays within guidelines -prepare written reports for management on a monthlybasis, detailing items that exceed or fall below requirements -investigatediscrepancies iii. R -performmonthly research to identify customer demands -review research and analyze data for methodsto increase sales or shopping convenience -performmonthly research to identify customer demands -designor modify products within three months if feasible iv. Human Resources -perform quarterly employee surveys toidentify ways to increase employee morale, use suggestion boxes for employeeswho wish to remain anonymous -award bonuses to employees who suggest waysNestle can save money or increase sales -award bonuses to employees who suggest newproducts or product modification.5.
FinancialforecastConsolidated Results 2015 2016 Sale 88786 89469 Trading operating profit 13382 13693 As% of sales 15.1% 15.3% Profit for the year attributable to hareholders of the parent (net profit) 9066 8531 As % of sales 10.02% 9.5% Balance sheetand Cash flow statement Results 2015 2016 Equity attributable to shareholders of the parent 62338 64590 Net financial debt 15425 13913 Ration of net financial debt to equity 24.7% 21.5% Operating cash flow 14302 15582 As % of net financial debt 92.7% 112.
0% Free cash flow 9945 10108 Capital expenditure 3872 4010 A % of sales 4.4% 4.5% Income statement Balancesheet 6. Implementation, control and contingency planImplementationand controlHaving developed a clear strategy, it isimportant to implement it. Nestlé will look to ensure that going forward allits products retain a superior taste profile while providing enhancednutritional benefits.
This will involve:i. retain certain productsii. product reformulations (includingsalt, sugar, fat reduction)iii. introducing new products with scientifically provennutritional benefits. Nestlé’s product research and development network ensuresit is well placed to meet the challenge of changes in consumer expectations.The Company’s Wellness strategy is carefully geared to delivering whatconsumers want in relation to the foods they eat – a high nutritional value anda positive contribution to their general wellness.
ContingencyplanThere is variety of risks involved inthe marketing plan. Following are some of the risks and their mitigationstrategies for the marketing plan of Nestle pure water.i. Wrong MarketInformation In markets the availability of completeand authentic data is very difficult. There are very few government sourceswhich provide the market information, but those also cannot be relied upon asthe data collection is not known. In case the data or information taken fromthe governmental sources is found to be incorrect then the company will relyupon the data collected from surveys and past trends. ii.
Outsourcing – If the internalresources are not able to meet the growing demand of the customers then theproduction will be outsourced, but the quality will not be sacrificed in anycase. iii. Mismatch of Projections – If thereis a mismatch of the financial projection then the efforts will be re-doubledand the focus will be on direct marketing. However, the other marketingexpenses will not be cut down as it is very necessary to keep conveying themessage across the target audience. Conclusionand recommendationInthis report we can understand about the various elements of the marketingprocess and the benefits and costs of a marketing orientation for a selectedorganization. Understand the micro and macro environmental factors, segmentationcriteria, targeting strategy and positioning to the new product.
Also how todevelop the product features, brand name and how to set a good price for thecustomers. How to distribute the product to the customers and promote theproduct to the customers. In this report can have a good knowledge of marketingmixes in different contexts.
When doing this report we can have good knowledgeabout the market and the behavior about the market.Nestlecan earn greater return from its typical competencies, i.e. sole strengths thatallow a company to achieve higher efficiency, quality, innovation and customer awareness.By applying those abilities, and the products they produce, to foreign marketswhere original competitors lack similar abilities and products, Nestle canrealize huge returns. Additionally,Nestle can take benefit of location economies. Location economies arise fromperforming a value creation activity in the optimal location for that activity,anywhere in the world. The best location for a value creating activity lowersthe costs of value creation therefore helping the company attain a low-costposition.
However, Nestle must evaluate basic entry decisions before entering adeveloping market. The company has to make a choice among different foreignmarkets on the basis of their long-run profit likely. Nestle has to balance thebenefits, costs.