NGÂN HÀNG NHÀ NƯỚC VIỆT NAM

TRƯỜNG ĐẠI HỌC NGÂN HÀNG TP. HỒ CHÍ MINH

ESSAY

TOPIC: ANALYZING THE MARKETING ACTIVITIES OF NESTLE

NAME: Ngô Huỳnh Trà Giang

STUDENT ID: 050607190115
CLASS: HT01
 TABLE OF CONTENTS

INDUCTION 3
I. NESTLE OVERVIEW .................................................................................................. 3
1. INTRODUCTION: ............................................................................................................ 3
2. DATA: ........................................................................................................................... 3
II. NESTLE’S MARKETING STRATEGY:.................................................................. 4
1. MARKET SEGMENTATION: ............................................................................................ 4
2. TARGET MARKET: ......................................................................................................... 5
3. POSITIONING OF NESTLE: ............................................................................................. 6
III. COMPETITIVE ADVANTAGES OF NESTLE: .................................................... 6
IV. MARKETING MIX: .................................................................................................. 8
1. PRODUCT: ..................................................................................................................... 8
2. PRICE ............................................................................................................................ 9
3. PLACE ........................................................................................................................... 9
4. PROMOTION ................................................................................................................ 10
V. CONCLUSION:.......................................................................................................... 10
REFERENCES ................................................................................................................ 12

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 INDUCTION
Today, marketing management is something that businesses have to go through in their
business process. This process is crucial to the success of a company. It involves
establishing a strategy for the company and its products, and it helps in determining the
type of marketing mix that will be most effective. It helps in setting clear goals and
objectives for the team, and it ensures that the entire team is focused on the right direction.
It also makes sure that no one is wasting time on activities that are relevant to the business
or customers.
Nestle is also one of the successful companies in marketing management. And in this essay
I will outline the factors that helped Nestle achieve that success.
I. NESTLE OVERVIEW
1. Introduction:
Founded in 1905 as a result of a merger of Anglo-Swiss Milk Company, Nestle was first
formed by Henri Nestlé in 1866. Established over 150 years ago, Nestlé is the world’s
largest, most diversified food and beverages company. It is a Swiss Company established in
1866 by its founder Henri Nestle. While its main foray is foods and drinks, it has hundreds of
products, nearly 2000. Some of its most famous products and brands include Maggi, Kit Kat,
Nespresso, Nescafe, etc. Nestlé provides a wide, diverse range of products, suitable for use
and consumption of everyone ranging from infants to adults.
The overall turnover for Nestle was approx 90 billion Swiss Franc in 2016. It operates 418
factories in 86 countries, employing nearly 339,000 people worldwide. Its products are
available in 191 countries of the world.
Nestle also is a leading researcher in the field of nutritional sciences. It invests nearly 1.5
billion Francs yearly on research and development. Currently(October 2018), Nestle has 17
R&D and Testing centres worldwide.
2. Data:
Ø Nestlé around the world 2020:

Sales 84.3 billion

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Hire 273.000 employees worldwide

376 factories in 81 countries

Ø 2020 Sales by geographic area

Americas: CHF 37.7 billion (45%)

Europe, Middle East and North Africa: CHF 24.5 billion (29%)

Asia, Oceania and sub-Saharan Africa: CHF 22.1 billion (26%)

Ø Strong sales contribution from emerging markets: Well positioned in fast

developing emerging markets 2020: 41% (as percentage of Group sales)

II. NESTLE’S MARKETING STRATEGY:

1. Market Segmentation:
Nestle’s market segmentation is similar to many different popular companies. It has 4
basic segmentation-strategies:
Ø Geographic: Nestle is based on the weather of the market where they focus on.
For instance, Nestlé Singapore segmented its market for Nescafe Ice depending on the
geographic weather warm hot, and cold. During the warm season, consumers make this
coffee with normal, chilled, or cold water mixing ice cubes to bring freshness to their
bodies. In contrast, consumers can make this coffee with hot water to keep their bodies
warm and comfortable in the winter.
Ø Demographic: The customer segmentation of Nestle is based on age, gender,
income , education.
Age: Nestle produces many kinds of products for different age groups.
For example, it offers milo for children and coffee for adults. Besides, Nestlé segmented
market area for its main products based on the generation. For the products Cerelac,
Lectogen, Koko Krunch, Nido, Nestle divided the market area segment for new born baby
and children of different ages.
Nido: It is nutritious milk specially makes for children 2 years onwards. It includes 25
minerals and vitamin D which helps child’s growth.

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Cerelac: Nestle also provide cerelac for new aged baby. It contains milk and rice mixture
for less than one year’s baby. It fulfills baby’s proper nutrition in foods.
Nesquick, Koko Krunch: above are chocolate milk for babies. Nesquick and Koko krunch
contain child’s required growth. It’s very sweet and delicious and also includes vitamin
protein, mineral.
Lactogen: Nestle Singapore brings full cream milk powder in the country. It gives baby
required nutrition. Lactogen one is for childs whose age not more than 6months and
lectogen 3 is for babies whose age is below 1 year.
Income: Nestle's products' price is affordable which suits every social class so they
produce the products in small quantities so that everyone can buy them.
Occupation: Nestle also manufactures its products based on consumers occupations. The
example of this is Nescafe classic: This product is for that type of persons those who work
busy and hard and requireds more freshness. Both the male and female who need more
caffeine and this type of needs Nescafe classic is for them.
Ø Psychographic: Nestle segments its products based on life style and personality.
Nestle provides KIT KAT these people who really want to enjoy chocolate. Nescafe
3 in 1 is for exclusively those customers who are really busy and do not have enough
time. They can save their time by taking Nescafe 3 in 1. All the things sugar, milk,
and coffee remain mixed.
Ø Behavioral: Based on benefits Nestle segmented their market in an efficient way.
So they make available Cerelac for those customers who want more profit from the
product. Cerelac includes high nutrition for baby’s whose age is less than 1 year.
Two very important things rice and milk remain added in cerelac. On the other part,
cerelac includes vitamins, more minerals, and all major useful nutritious elements
for babies.
2. Target market:
Nestle’s target market has two special things:

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 Ø DIFFERENTIATED: The nestle company chooses differentiated marketing, where
they provide different products for different segments on basis of age, occupation,
seasons, climate , gender etc.
Ø CONCENTRATED: By concentrated marketing the nestle has gained a strong
market value because of their good knowledge of their customers.
=> In general, Nestle is specialized in making baby drinks and white-collar who are busy.
3. Positioning of Nestle: Nestle has 4 features different from other companies to help
their success which are in the same industry:
Ø Product differentiation: Nestle produces many numbers of products for target
customers, they produce around 25 varieties of Nido for children, it specially
manufactures cereals and lactogen 1 and 3 for newborn babies.
Ø Channel differentiation: Nestle sells its products by experienced salesmen and safe
transporting so their products are easily reached to the customers.
Ø Image differentiation: The Nestle logo is completely different from other
companies and competitors so that it is easily identified by the customers.
Ø Service differentiation: The nestle company has 24/7 helpline centers so that the
customers can be easily accessible to the problems or any doubts.
III. COMPETITIVE ADVANTAGES OF NESTLE:
Ø Nestle competitor is Pepsico which is a popular beverage and food processing
company that was formed during the year 1898. The company is headquartered in
New York, United States. The company has been in business operations of
manufacturing and selling of beverages, snacks based on grains, and many other
products.
Ø The company was formed after the merger of Pepsi-Cola and Frito-Lay companies.
Over the years, Pepsico has been expanded to a great range of products in food and
beverages. It is a famous brand worldwide and more common among the youth. The
company has a great brand image and its approximate value of the brand is about
$19.4 billion. This brand has great loyal customers and has a wide distribution

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 network. The company has an excellent supply chain network worldwide and due
to which their products are made available everywhere.
Ø The company’s main highlight is their tie-up with various sports and music events
and thereby increasing the brand value. Due to the company’s great brand value,
Pepsico is considered as one of the top Nestle competitors.
Nevertheless, Nestlé is not afraid of competition because they have 4 competitive
advantages that make they are stronger than Pepsi:
Ø Firstly, Bolstered Research & Development: This is one of important their
advantages. Over the years, they have heavily invested in the research and
development division. The company, backed up by its extensive research efforts has
gained a tremendous edge in market data and consumer insights compared to their
close rivals. The company now knows how to capture a market and drive more sales
to boost revenue earnings altogether. This investment paid off in the form of 1.89%
of their total revenue generation. In contrast, Nestle’s closest rival in these terms,
Pepsico, only invested 1.2%.
Ø Product Availability: When it comes to Nestle, they believe strength in diversity.
Despite being their largest operational market in the world, The U.S only generates
28.5% of the company’s total revenue stream. Their second largest market, China,
generates only around 8%. In contrast, Pepsico earns 56% of their revenues from
The U.S only. Nestle’s varied types of products are operational in 189 countries
worldwide. This goes to further illustrate how the company doesn’t put all their eggs
in one basket. Compared to their rivals, Nestle has done an exemplary job of
branching out to almost every corner of the world, ensuring product availability at
a faster rate than any other market operator. Their products are more frequently
available on stores than their competitors, which has given them a competitive edge.
They have established product accessbility for online shopping faster than their
rivals as well, in markets all over the globe.
Ø Plant-Based Meals: Nestle has just recently entered the meatless meal market too,
offering plant-based meals for vegetarian as well as ‘flexitarian’ dieters. People

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 have started to consume less meat and include more veggie recipes in their eating
habits. Nestle seized this opportunity to penetrate an untapped market and gain a
competitive advantage by offering food options to a new branch of consumers. This
addition is generating higher sales volumes compared to their rivals as well.
IV. MARKETING MIX:
Nestle’s marketing mix examines the four Ps of one of the world’s most successful FMCG
companies. Nestle’s marketing mix demonstrates that the company has a solid product
range, which contributes to its marketing mix’s success. Below are the products, price,
placement and promotions of Nestle.
1. Product: Nestle is one of the companies have variety products, they have more than 10
types of different products from drinking to food suit their target market:
Ø Beverages – One of the most known coffee brands Nescafe, belongs to the house
of Nestle and is one of the cash cows for Nestle. However, it is not the biggest cash
cow. Nestle has a worldwide distribution and has many different variants. Looking
at India, Nestle has also launched Nestea.
Ø Milk and Milk products – Nestle everyday, Nestle slim and Nestle Milk maid are
some of the milk and milk based products from the house of Nestle.
Ø Prepared dishes and cooking aides – Nestle has a third category of products which
comes into prepared dishes and cooking aides. The major cash cow of Nestle lies in
this segment, which is Maggi Noodles. Probably one of the most widely sold ready
to cook noodle brands is Maggi. Maggi has a fantastic taste and quality. Thus, it was
not a surprise, that Nestle expanded the Maggi brand to create an umbrella of
different products like Maggi pasta, Maggi sauce, Maggi cubes etc. The maggi range
contributes vastly to the bottom line of Nestle.
Ø Chocolates – Nestle has some popular chocolate products, most popular being
Nestle Kitkat, Munch, Milky bar, Eclairs and Polo. The newly introduced Alpino is
targeting the gifting segment in response to various chocolates like Dairy milk and
Bournville by Cadbury. The chocolates segment of Nestle is a star, where the

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 competition is high and the expense is high but at the same time the market size is
huge as well.
Ø Nutrition and Health Science:- Nestle’s infant formula and baby meals are
included in this category.
Ø Waters:- Nestle’s Pure Life is the world’s most popular bottled water brand, with
distribution in more than 100 countries.
2. Price
Ø Nestle aspires to provide a diverse range of products and services that respond to
changing consumer demands. It aspires to make items that are both good for people
and good for the environment. The price is dependent on the market of each
individual products. For example, Nescafe and Maggi being the clear leaders are
priced with higher margins for the company as compared to competition. This is
because the product quality is good enough and a bit of skimming price will not
cause the customer to switch brands.
Ø Nestle offers a variety of sizes and packaging options for both Nescafe and Maggi.
You may even purchase a 16 packet Maggi in supermarkets, whereas 5rs Maggi can
be found in tiny retail shops. Due to fierce rivalry from other companies, Nestle
offers competitive prices on other items such as Kitkat and Munch. Nestle will be
priced similarly to several of Cadbury’s chocolate products in the chocolate market.
Ø As a result of the diversity provided, customers can make their own decisions based
on their needs.
3. Place
Nestle follows the FMCG strategy of distribution which involves breaking the bulk. The
typical distribution strategy of Nestle is as follows:
ð Manufacturing => C & F agent => Distributors => Retailers => Consumer
ð Manufacturing => Bulk buyers => Consumer
Ø These are the two different forms of distribution which Nestle has. It is typical of
any FMCG company. However, the Nestle channel is known to be strong with a
good marketing and sales network for channel distribution.

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 Ø On top of it, Nestle regularly introduces trade discounts and various tactics to keep
the channel motivated. The major challenge is in the distribution of Maggi which is
the most in-demand product along with Nescafe. Due to these two products, Nestle
is able to drive other products in the market as well. Thus, on purchase of one weak
product, the distributor might get a discount on the stronger product or vice versa.
Ø The challenge for Nestle is in the chocolate segment where it faces stiff competition
from Cadbury and hence selling the chocolates becomes difficult. Kitkat might have
its own brand positioning, but it is not better than Dairy milk. Thus, converting
retailers to sell Nestle instead of Cadbury is the toughest task for Nestle. This is
converted mainly through promotions.
4. Promotion
Ø When it comes to branding their products, Nestle has always come up with some
creative marketing concepts. Nestle aims to identify the most effective promotional
medium. They face tremendous competition from their local and global competitors.
Nestle uses two types of sales promotion techniques – Trade promotion and
Consumer promotion. Nescafe introduced Nescafe tunes, which are still spoken
about today. They have always attempted to persuade consumers to purchase their
products. Take Maggi, for example, which is linked with two-minute snacks that
women can readily prepare. It became well-known among children and moms as a
result of this. They’ve always prioritized product quality and nutritional value.
Ø Maggi and Nescafe have pushed sales and marketing because of their strong
presence on the ground. Nestle’s distinct marketing message for Kitkat, a well-
known Nestle trademark, is “Have a Break, Have a KitKat,” which has become
synonymous with the brand. Nestle employs a variety of media, including
television, billboards, print commercials, and online advertisements.
V. CONCLUSION:
Ø Nestle is one of the successful FMCG manufacturers and distributors in the world,
and Nestle is no stranger to the Vietnamese market. Nestle owns many famous

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 brands such as Milo milk, and KitKat is considered one of the famous and best-
selling chocolate candies around the world.
Ø To have the current global recognition, Nestle has had to make a lot of efforts and
their success comes from two main factors:
• First, they correctly identified and met the needs of their target market. Nestle
spends a huge budget to research the market, understand the needs and tastes
of customers. Thanks to that, they have launched many products that meet
the needs of customers and create a great resonance.
• Second, undeniably their success cannot fail to mention the contribution of
the Marketing mix. Based on that, they launch many products that meet the
needs of customers to satisfy them. In addition, they can also increase the
shopping demand of customers when offering attractive promotions. Thanks
to the right strategy from the Marketing mix, they are able to expand their
products and markets.

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