Batch 90-Individual report

Assignment Cover Sheet

Qualification Module Number and Title

HD in Business Management BM4153: Fundamentals of Marketing

Student Name & No. Assessor

K.P.D Harini Mayuri Wickramarathne - 40 Ms. Randika Dulanthi

Hand out date Submission Date

15th of January 2021

Assessment type Duration/Length of Weighting of Assessment

Assessment Type

Coursework (3000 words) 70%

Learner declaration

I, K.P.D Harini Mayuri Wickramarathne certify that the work submitted for this assignment is my
own and research sources are fully acknowledged.

Marks Awarded

First assessor

IV marks

Agreed grade

Signature of the assessor Date:

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FEEDBACK FORM

INTERNATIONAL COLLEGE OF BUSINESS & TECHNOLOGY

Module : BM4153: Fundamentals of Marketing

Student : K.P.D Harini Mayuri Wickramarathne

Assessor : Randika Dulanthi

Assignment : Report

Strong features of your work:

Areas for improvement:

Marks Awarded:

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Nestle Lanka PLC

Coursework – Individual report

Prepared by,
K.P.D Harini Mayuri Wickramarathne
Student no. – 40
HD/BM Batch 90

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Acknowledgment

This report is done as a semester assignment about Nestle Lanka PLC, as a part of my higher
diploma in Business Management at ICBT campus. Initially, the author would like to take this
opportunity to express her profound gratitude and deep regards to her marketing lecturer Ms.
Randika Dulanthi for her exemplary guidance, monitoring, and encouragement throughout the
whole Fundamental of marketing management study sessions. And at the same time, the author
would like to thank her parents and sister with a deep sense of gratefulness to sacrifices which
made by them to successfully complete my report. Finally, the author would like to thank each
and every one who helped in completing her individual report.

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Table of contents

Assignment Cover Sheet ..................................................................................................................... 1

Acknowledgment ................................................................................................................................ 4
Executive summary............................................................................................................................. 6
Introduction ......................................................................................................................................... 7
Q1: Identifying the Internal environment (SWOT analysis)............................................................... 8
1.1:Strengths ............................................................................................................................. 8
1.2:Weaknesses ........................................................................................................................ 8
1.3:Opportunities ...................................................................................................................... 9
Q2:Identifying the External environment (PEST analysis) ................................................................ 9
2.1:Political environment ....................................................................................................... 10
2.2:Economic environment..................................................................................................... 10
2.3:Social environment ........................................................................................................... 10
2.4:Technological environment .............................................................................................. 10
Q3:Analyzing consumer buying behavior of Nestle Maggi Instant noodles .................................... 11
3.1:Analyze the other stimuli and marketing stimuli.............................................................. 11
3.2:Buying decision process ................................................................................................... 13
3.3:Purchase decision ............................................................................................................. 14
Q4:Segmentation,targeting,positioning of Maggi Noodles…………………………………………15
4.1.Segmentation................................................................................................................................ 14
4.1.1:Geographic market ........................................................................................................ 15
4.1.2:Demographic market ..................................................................................................... 15
4.1.3:Psychographic market ................................................................................................... 15
4.1.4:Behavioral market ......................................................................................................... 15
4.2.Target market of Maggi Instant noodles........................................................................... 16
4.3.How nestle has positioned Maggi instant noodles............................................................ 16
4.4.Positioning map for Maggi instant noodles ...................................................................... 17
Q5:Marketing mix that have been followed by Nestle Maggi noodles............................................. 17
5.1:Product ............................................................................................................................. 17
5.2:Price .................................................................................................................................. 18
5.3:Place ................................................................................................................................. 18
5.4:Promotion ......................................................................................................................... 19
Conclusion ........................................................................................................................................ 20
References ......................................................................................................................................... 21

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Executive summary

Nestle is a world known multinational company, headquartered in Switzerland and one of the
massive food and beverage company worldwide. They make sure of the fact that the key
products such as Nestomalt, Nespray, Milo, Milkmaid, Nan grow, are absolutely the best to
use. Nestle has an ample of products to supply for their consumers and they guaranteed all the
products are the best of their types.

This report aims at recognizing Nestle’s marketing activities through critical identification.
First,the author has presented the history of the company and introduction. Next, the author has
been identifying about the internal and external environmental factors by doing the SWOT and
PEST analysis of Nestle Lanka PLC and how they have identified the consumer buying
behavior of Maggi instant noodles of their customers, how they have segmented, targeted,
positioned their targeted consumer market. Their main and direct local competitor can name as
“Prima” in instant noodles market. And indirectly, Harishchandra, Alli, Sera, Roza, compete
Nestle. And the author has point out which marketing strategies they have been using in their
marketing process. As references the author has got information about the of Nestle marketing
process and other strategic information via internet and from some books concerning practices
of Marketing Management.

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Introduction

The history of Nestle begins in 1866, with the foundation of the Angelo-Swiss condensed milk
company(Nestle Global).It established in Sri Lanka in 1906 with condensed milk and infant
food products(Nestle Sri Lanka).The determination of this company is enhancing quality of
life and contributing to a healthier future. Nestle is based out of Switzerland which has
operations in multiple regions. In Sri Lanka their chairman is Mr. Suresh Narayanan and the
managing director is Mr. Fabrice Cavallin(Nestle Annual report-2019).In Kurunegala factory
they manufacture most of the products which sells in Sri Lanka. As one of Sri Lanka’s oldest
leading company, Nestle Lanka PLC is engaged in manufacturing, marketing, selling and
distribution of world known food and beverage products such as Nescafe, Nestomalt,
Milkmaid, Milo, Nespray, Maggi, KitKat.

Their goal is to be the leader in nutrition, health and wellness from the global food and beverage
industry. It reflects from their motto, “Good Food, Good Life”. Not only for consumers but
also, they have given a major number of job opportunities directly for the people in our country
more than 1100 and indirectly for over 23000 such as farmers, retailers, suppliers, distributors
(Nestle in Sri Lanka-2015)

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Q1: Identifying the Internal environment (SWOT analysis)

1. Internal environment is composed of the elements within the organization, or we can define
internal environment as the parties which can be controlled within the organization. The
overall evaluation of a company’s strengths, weaknesses, opportunities, and threats is
called SWOT analysis. It’s the way of monitoring the external and internal marketing facts
of an organization.
“Nestle” as a world-prominent brand name, it is a must to do a SWOT analysis to make
sure to give an exclusive service for their consumers.

1.1:Strengths
• Highly reputed brand name – they own a respected reputation in food and beverages sector
for offering high quality and trusted products among their customers.
• Popular brands and well-established relationships – Nestle has the world’s leading brands
such as Nescafe, KitKat, Milo, Maggi, Milkmaid, Nestomalt etc.
• World’s valuable brand – Nestle is known as the world’s valuable company with reference
to high profits, higher revenues, assets and market value. (2018 Forbes Global)

1.2:Weaknesses

• Organizational structure and span to control – Nestle uses a matrix organizational structure
that hard to manage their major number of brands can often end up with conflicts and
disorders.
• Social criticism – they criticized because of using children and slaves as their labors for
making chocolates.
• War of words about “Maggi” – they added chemicals such as MSG for Maggi noodles that
was harmful for human beings. Because of this case they loss 80% of their market.(Sounak
Mitra 2017).
Threat and opportunities could be found in external environment of the organization. A
business unit must monitor the key factors that affect its ability to earn profit. A marketing
opportunity is an area of buyer need and interest that a company has a high probability of
profitably satisfying and threats are challenges posed by an unfavorable trend or
development, would lead to lower sales and profits.

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1.3:Opportunities

• Significant demand for breakfast cereals – Nestle cereals such as cerelac, corn flakes have
shown a fast grow through past years.
• Expansion of coffee market – Nescafe is one of their products in market peak. In parties,
funerals Nescafé is known as an essential product mostly in Sri Lanka.
• Authentic labeling – Nestle breached a law because the included misleading information to
product labels. So, they got Market share for instant noodles
that as an opportunity to Maggi

improve practices by giving Koththu

2% Mee
trustworthy information for Knorr
32%
consumers. 48% Prima Stella

• Leader of the instant 4%

14%
Others

noodles market-Maggi
owns a market share of 42% Pie chart 1 (Nielson,201

(Nielson,2013)

1.4:Threats

• Water scarcity – the company’s production is mainly depending on water because it’s a
food and beverages company. Penetrate clean water from immoderate
• Deriving competition – Many leading companies such as Unilever, John Keels, Haleys
offer similar food and beverages products so for Nestle it’s a challenge to compete with
them because the substitutes products are easily available.
• Government regulations – such as environmental policies. Nestle had to face severe
criticism for illegal rainforest destruction controversy in 2017.(Arthur Neslen-2017)

Q2:Identifying the External environment (PEST analysis)

1) When we are doing the PEST analysis it comes under the macro environment of the
respective company. The macro environment includes all the factors that influence and
organization but are outside of their control.Then the managers must make a flexible
marketing practices to respond to this dynamic environment.
Now we will see how Nestle affected by four prominent environmental factors; political,
economic, social, technological.

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2.1:Political environment

• Changing global food standard regulations – food standards such as to avoid harmless
ingredients. E.g.; Maggi noodles banned once because they were adding harmful chemicals
as MSG.
• Stewardship campaigns in partnerships with government – Nestle joined with ministry of
education and central authority to raise awareness on proper waste management in schools
and also,they have donated waste management units for schools. (Nestle Annual report
2019)

2.2:Economic environment

• Rising prices of raw materials from suppliers – because of the inflation the raw material
prices such as raw milk, sugar increasing has been a major issue.
• Changing consumer budgets and taste – especially because of this Covid-19 pandemic
many consumers lost their income sources so they changed their daily budgets.

2.3:Social environment

• Changing consumer attitudes such as move towards healthier products- we can mention
Maggi as an example here. Doctors and scientists said MSG is harmful and it will lead to
cancers. So, a large number of Maggi consumers stooped buying this product. It was a
major loss for Nestle.
• Growing instant coffee and ready to drink tea market – products such as Nescafe, Nestea
have become successful brands because of the great taste,thickness,and the trusted quality
for many years.

2.4:Technological environment

• Rise of social media used to increase consumer interaction. – with the fast pace of
technological innovation Nestle.
• Cyber-attacks – they had to invest more on cyber security and privacy data because of the
increase of cyber-attacks.
• E commerce – because of the technology development e commerce concept also used
massively. E.g. – Nestle products got available in Daraz online store to purchase products
virtually.

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Q3:Analyzing consumer buying behavior of Nestle Maggi Instant noodles

2) Consumer buying behavior is the study of how individuals, groups, and organizations
select, buy, use, and dispose of goods and services, ideas, or experiences to satisfy their
needs and wants. (Marketing Management in South Asian perspective by Philip Kotler and
Kevin Lane Keller)From Nestle, I selected Maggi instant noodles as the product to do the
consumer buying behavior analysis. Maggi instant noodles is a Nestle product which has
founded by Julius Maggi. He has created a delicious recipe of flavors as taste enhancement
to daily meals.There are 3 main steps to do the consumer buying behavior.
Analyze other stimuli and marketing stimuli
Identify and change marketing mix
Buying decision process

3.1:Analyze the other stimuli and marketing stimuli

3.1.1:Other stimuli
• Economic factors
Increase in the targeted customer base – e.g.Working young crowd, student population

Competition in domestic market – Such as local manufacturers, e.g.Prima Instant noodles, Alli,
Harishchandra. FCMG importers e.g. San Remo, Roza pasta.

• Technological factors
Social media advertising – Nestle has created Facebook,Instagram,YouTube pages for Maggi
to show off the new recipes’ new innovations etc.
• Political factors
Government restrictions – Maggi noodle banned because government food policies. They were
using MSG for Maggi.
• Cultural factors
Different stories for different cultures – Nestle had to vary the flavors from region to region
because of the different tastes for different
cultures.E.g.- especially for Sri Lanka they made
Maggi daiya range with adding extra spice.

3.1.2:Marketing stimuli

Product Maggi instant noodles basically

is a snack that can be prepared within 2 to 3

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minutes, which have to cook under hot boiling water.A packet of noodles is packed together
with a small package of flavor.This packet contains a mixture of vegetables, spices, and
herbs.This noodle comes under a variety of flavors such as vegetable, chicken, hot and spicy
based on consumer perceptions.

Price- affordable price for everyone. (In customer’s point of view) Price goes with
the income from the customers point of view. Simply we can tell income is associated with
social class and the purchasing power of individuals.They sell it for an affordable price for
everyone, as an example Nestle introduced Maggi Family pack for Rs. 170.00(SPAR super
market-2020) which contains 6 individual packets inside it.

Distribution – Print ads, TV advertisements, social media Slogans such as fast to

cook, good to eat educated their consumers that Maggi is instant but healthy. 2 minutes noodles
concept changed the target market. They usually use young girls and boys and celebrities and
created Facebook pages to ask questions and for inquires.

Communication Once Nestle Maggi Noodles were banned because they were using
unsafe, harmful excessive chemicals. Nestle dropped their sales significantly. Consumers got
afraid to buy Maggi noodles. After this critical case Nestlé conducted many campaigns to
confirm that they are using natural ingredients to their production. And their advertisements
also helped to make Maggi as a healthy food.So, now again Maggi has risen their demand in
the consumer market.

3.1.3:Consumer psychological factors

Motivation – targeted Sri Lankan families with its easy to make concept and
efficiency.Launched Maggi daiya range for spicy lovers that became a motivation tool for Sri
Lankans.

Perception – an easy to make product which has a great taste and healthy.After they were
banned nestle got more responsible to make their products healthily without any harmful
chemicals.Therefore, it became a healthy product among mothers.

Learning – it’s an easy food that can be cooked by kids on their own.And can enjoy at any
time.

Memory – Maggi is an alternative for pasta, spaghettis,that takes a long time to prepare.

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Consumer characteristics
These are the main consumer characteristics.

➢ Cultural factors
➢ Personal factors
➢ Social factors

Each culture consists subcultures that provide specific identifications such as nationalities,
religions,and geographic regions.

For Maggi instant noodle culture is influencing as customs and beliefs that people were
followed from their grandparents as daily habits.For example, in a family since their children
were small, parents prepare the instant noodle as a meal for them.And at the same time when
children become teenagers, they can prepare the noodle by their own and consume it as a
meal.Nestle further did their research about the subcultures in Sri Lanka and the taste which
Sri Lankans will accept and the need for different tastes.So, they introduced Maggi curry flavor
and daiya flavor especially for Sri Lankans.

Personal factors can be defined as the individual factors that can control an individual’s buying
behavior.First one is age and life style, because some main factors such as food habits, clothing,
hobbies vary as age increases.Especially food habits change rapidly.This come up with Maggi
noodles as well.As an example, a youngster would like to eat such as Maggi daiya, Maggi
papare koththu flavors but at the same time an adult would like to consume soup flavors.

3.2:Buying decision process

Problem recognition – hunger stimulates the need of food.Maggi desires it. When we see
Maggi advertisements in TV, we feel hunger because of the delicious mouth-watering
images.So, people tend to buy.

Information search – this includes personal

sources, commercial sources and public sources and
experimental sources.Now, Maggi has become a
household name.This has helped to gain the brand
name through word of mouth.

Evaluations and alternatives – When come to

evaluation customers focus on 2 main criteria.One is,

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list of brands. And the other is which they plan to make their buying decision.Maggi has always
given something new to market that has helped to choose them from other competitive products
such as Prima Stella, Sera etc.

3.3:Purchase decision
After the evaluation consumers will get to know about the choices.Before make the purchase,
decision there are some factors that consumers focus.

Product
Brand
Dealer
Quantity
Time
Payment method
Personal factors
Because of the strong brand awareness and the great taste of Maggi, consumer prefer it. It is
easy to purchase from the nearest grocery without any problems. Maggi comes in varies sizes
so it’s convenient to make the purchase decision.

Q4:Segmentation,targeting,positioning of Maggi Noodles

4.1.Segmentation

04) a). “Market segmentation is the sub-

dividing of market into homogeneous
sub-sections of customers,where any
sub-section may conceivably be selected
as a market target to be reached with a
distinct marketing mix.” (Philip
Kotler).Not everyone likes the same
products or services. Therefore, market

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should be divided to variables parts. So, marketers need to identify about the consumer groups
in the market.Mainly they divide the market into four segmentations such as Demographic,
demographic, psychological, behavioral.

Maggi noodles has segmented their consumer market as below.

4.1.1:Geographic market

Urbanized and semi-urbanized areas – because their target market is mainly the busy working
women that expect a quick meal that can be cooked in a short time.

Multiple regions – they have their productions leading countries such as India, Switzerland,
Malaysia etc. therefore,they introduced many different flavors for different cultures of
countries.
4.1.2:Demographic market

All age groups - Maggi noodle is covering all age groups. Flavors such as cheese, chicken,
curry mostly consumed by all age groups especially among kids. The new innovations of
flavors such as papare koththu,daiya flavor and extra daiya flavors are very popular among
the youth generation.

Gender-Both female and male consumers can consumer Maggi noodles.They introduced
Maggi family packs for families with discounts.And also, recently they introduced Maggi
broad family pack which is similar to koththu for an affordable price like Rs.180(320g) for all
income class groups.(Nestle)
4.1.3:Psychographic market

Lifestyle – Nestle mostly concerned about the cultural factors because specially the taste
depends on the culture.So, Maggi follows a culture-oriented lifestyle.They have a variety of
flavors such as daiya, cheese, chicken, curry etc.
4.1.4:Behavioral market

Benefits – Nestle, as a world known company their consumers have a trust towards the
brands.And they always try to give quality products for consumers.They have a specific Nestle
policy that has every single detail about the company’s safety and the quality. (Nestle)

User status – Nowadays Maggi is known as a daily meal because of the convenience of
preparing it.

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Attitude – attitude towards the Maggi noodles is positive.Because it is enriched with nutritious
and the convenient.
4.2.Target market of Maggi Instant noodles

b) Target market is selecting the most profitable market segments or attractive segments from
the marketing product. There are 2 main criteria when comes to market targeting.

What is the most profitable market segment?

Does this segment go with the product?

Nestle Maggi noodle’s main target market is kids, working women, and the young people.From
the beginning they wanted to gain the audience which were needed a quick and easy meal that
can be cooked in few minutes.
4.3.How nestle has positioned Maggi instant noodles

c) “The act of designing the company's offering and image to occupy a distinctive place in the
mind of the target market” (Philip Kotler).

Nestle positioned their products as a snack at the beginning rather than a meal.They give their
image clearly and distinctly among consumers.They populated messages among people such
as “Who knows your taste better than us”.Nestle is positioning the products against
competitors through efficient and attractive promotional tools,sponsorings innovations, etc.
Nestle tried to position Maggi noodle in the objective of convenience or ease of use by targeting
the busy working women. In their advertisements also they tried to enhance about this.They
always endeavor to use busy mothers/women and their kids.Once Maggi got banned in India
because Nestle were adding harmful ingredients such as MSG, artificial colors, artificial
preservations.After that Maggi repositioned it as a “healthy noodles”.And they conducted many
surveys and from those they found that Maggi instant noodles is one of kid’s favorite snacks.

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4.4.Positioning map for Maggi instant noodles

High price

Low efficiency High efficiency

low price

Q5:Marketing mix that have been followed by Nestle Maggi noodles

5). “Marketing mix is the set of controllable variables that the firm can use to influence the
buyer’s response” (Philip Kotler) Marketing mix investigate data from variety sources such as
product strategy, pricing strategy, media, and promotion to understand more precisely the
effects of specific activities.

5.1:Product

Maggi is one of Nestle’s leading product.They have many products under the brand name
Maggi such as instant noodles, seasoning, powdered coconut powder.For this report I have
taken Maggi Instant noodles as my product.“2 minutes noodle” is their main concept.

Core product – core product not the physical tangible product.That is the core benefit of the
product that gives the value for the product.In Maggi noodles the main benefit is “Fast to cook

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and good to eat”.This can be cooked within 2 minutes as a delicious meal with nutritious such
as carbohydrates, proteins.

Generic product – This includes the packaging and the main components which gives the core
benefit.eg: The sachet of seasoning.

Expected product – Good safely fully packed package and harmless seasoning tastemaker for
an affordable price.

Augmented product – Augmented product is the product goes beyond customer expectations.
Maggi introduced Maggi Papare Koththu as a new trend.This is a new way of eating noodles
in a different way.Especially in the cricket season this product became famous because youth
generation got this new taste as a substitute for koththu.This is Maggi’s first broad noodles.

Potential product – This is a product of a combination of augmented and transformations a

product that might receive in anticipated future.As to my point of view Maggi must launch a
pizza flavored instant noodles in the future because majority of people are loving eating pizza
but as to the high price most of them don’t tend to eat it.Therefore, I recommend to launch
pizza flavor for an affordable price.

5.2:Price

Next,we have to identify about the how to decide the price of the product.Nestle pricing
strategies varies from country to another.In Sri Lanka Nestle uses competitive pricing
strategy (Nestle-2015).Competitive pricing is a setting the price as same as the
competitors.Especially because of the huge competition in noodles market in Sri Lanka.As
examples, we can name PRIMA, HARISCHANDRA, ALLI, SERA etc.Maggi has a good
market share in Sri Lanka.

5.3:Place
Maggi uses an intensive distribution intensity and wide distribution network.Maggi
products are taken from the factories and carry for the stores.Nestle’s distribution strategy is as
follow;

Manufacturing agents distributors retailers consumer

Manufacturing wholesalers consumer

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5.4:Promotion

Maggi followed a its promotional

activities included creativity.They
focusing kids’ taste and health from
advertisements.eg.launching the
“Tikiri” range especially for
kids.They targeted school children’s
interval meal because it’s an instant
noodle and it can be cooked within 2
minutes.Maggi turned out to be a huge
promoter for the brand especially
because they made it an instant household name.Their tagline is “2-minute noodles” known to
be the smartest tagline and it became very popular among their consumers. And they offered
many fun activities such as fun books, scratch and win coupons, discounts and money back
offers to their promotions successfully. Nestlé created a page to ask questions about Maggi
because still consumers have concerns about Maggi(Nestle Sri Lanka).

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Conclusion

Nestle’s products are popular among people because of the quality and the trust since many
years. In this report the author has recognized what are the internal and external environmental
factors that affect Nestle’s trade activities by doing a SWOT and PEST analysis.When comes
to consumer buying behavior,I have taken Maggi instant noodles as my product to do the
research.How consumers have responded to Maggi noodles?Nestle has provided quality
products that can lead to good business growth and effective development.It has segmented the
market based on specific clusters by categorizing individual requirements of the customers.
What was their target market for Maggi noodles and what are the requirements that Nestle
focused when they positioned it in a lucrative way? Eventually I have identified how Nestle
has used their marketing mix to make Maggi to a successful product worldwide. Finally, from
this report I have evaluated and examined Nestle’s performances in the market with their
marketing strategies.

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References

• Marketing Management in a south Asian perspective- (Philip Kotler, Kevin Lane

Keller)
• https://www.confectionerynews.com/Article/2018/02/13/Nestle-sued-again-over-
child-labor-in-cocoa-supply-chain
• https://www.livemint.com/Companies/1JKHsutTXLWtTcVwdIDg0H/The-Maggi-
ban-How-Indias-favourite-twominute-noodles-lost.html
• Annual report of Nestle(2015) -
https://www.nestle.lk/sites/g/files/pydnoa551/files/asset-library/documents/annual-
reports/nestle-annual-report-2015.pdf
• Annual report of Nestle(2019) -
https://www.nestle.lk/sites/g/files/pydnoa551/files/2020-
06/nestl%C3%A9lankaannualreport2019.pdf
• https://www.mordorintelligence.com/industry-reports/instant-noodles-industry-in-sri-
lanka
• https://www.marketing91.com/marketing-mix-of-maggi/
• Nestle Maggi web page - https://www.nestle.lk/ask-nestle/maggi-noodles-in-sri-lanka
• Retrieved from https://www.nestle.com/brands/allbrands/maggi_
• What are the factors that affects consumer behavior-
https://businessjargons.com/cultural-factors-influencing-consumer-behavior.html
• SLIM Neilson awards web page- https://peoplesawards.lk/

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