BACHELOR BUSINESS ADMINISTRATION HONS

SEMESTER 5 / 2022

BBPM2203

MARKETING MANAGEMENT II

MATRICULATION NO : xxxxxx

IDENTITY CARD NO. : xxxxxx

TELEPHONE NO. : xxxxxx

E-MAIL : xxxxxx

LEARNING CENTRE : BANGI LEARNING CENTER

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No Content Page
1. Introduction about Nestle Company 3-4
2. Marketing Mix analysis for introduction stage 4-5
of product life cycle
- Product
- Place
- Price
- Promotion
3. Marketing Mix analysis for Growth stage of 5-6
product life cycle
4. Marketing Mix analysis for Maturity stage of 6
product life cycle
5. Marketing Mix analysis for Decline stage of 6
product life cycle
6. Summary 7
7. Reference 7

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 Nestlé is a multinational corporation that ranks among the world’s largest in the food and
beverage industry. Heinrich Nestle also known as Henri Nestle founded the Nestlé Company in 1866
with its headquarters in Vevey, Switzerland. Nestlé’s Malaysia was founded in Malaysia in 1912 as
the Anglo-Swiss Condensed Milk Company. Nestlé Malaysia’s headquarters are now in Mutiara
Damansara, Petaling Jaya Selangor and the company has 6 sales offices and over 5000 employees
nationwide. Furthermore, Nestlé manufactures its own products in 7 Factories and sells over 300
halal product throughout the country. Nestle is a food and beverage company that has many well-
known brands in Malaysia including Maggi, Nescafe, Milo, Kit Kat, Nesvita (formerly known as
Nestum) and pet care product such as Purina and Friskies. Nestlé vision is to be the leader in
Nutrition, Health and Wellness Company by delivering world class products of the highest consistent
quality, reliability and convenience based on business excellence principle throughout the operation.
Nestlé’s mission is to improve people’s lives by providing good food and beverages everywhere so
they can live healthier lives. Nestlé Nutrition Research Centre pays close attention to understanding
consumer’s nutritional and emotional needs and utilising today’s world superior science and
technology to produce high quality product for the world in order to achieve their vision and
mission.

As a result of the global market becoming extremely competitive and consumers becoming
increasingly demanding it is becoming increasingly difficult to satisfy them. Nestlé employs target
marketing for each of their product to their customers. Nestlé baby milk product such as Nestlé
Neslac Excella Gold are for example only available to infants and toddlers in the consumer market.
However baby lacks the financial means to purchase the food they require. As a result in marketing
this baby milk product, Nestlé focuses not only on the baby basic need which is hunger but also on
the baby’s parent in term of how the nutrient provided will give their children the best possible
advantages in their life and development. Nestlé Milo, a chocolate and malt milk beverage is another
example. Don Howart, the executive director of Nestle and Singapore Coffee and Beverage stated
that Milo remains popular among the young and has a 90% market share among chocolate malt
drinks in Malaysia. Nestlé Milo drinks target market include people over the age of 50 as well as
those who are physically active. However, Nestlé ‘s business was initially launched internationally
and the company realised that food products must be tailored to local environment and social
behaviour due to the country’s practises, cultures and traditions. As a result, Nestlé has always
shown respect for diverse cultures and traditions while also adding its own set of values to the local
environment. Nestle values cultural and social diversity and does not discriminate against people
based on their origin, nationality, religion, race, gender or age.

Nestlé has a large and diverse product portfolio that primary consists of products in the
seven categories listed below. In recent years, the company has focused on innovating its product
portfolio in response to changing consumer needs around the world. Nestlé’s largest and most
profitable product was Nestles coffee, cocoa and malt beverages as well as tea products are included
in this category. It also includes some of Nestlé’s most recognisable brands such as Nescafe the
world’s most popular coffee brand; Nespresso, premium coffee and Milo the world’s most popular
chocolate malt drink. In 2018, this category accounted for 23.6 % of Nestlé’s net sales generating
CHF 21.6 billion in revenue. Nestlé’s infant formula and baby food are among the products in the
Nutrition and Health Science category. In 2018, it accounted for 17.7 % of Nestlé’s net sales
generating CHF 16.2 billion in revenue. Milk products particularly that Nido brand are an important

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component of Nestlé’s health and wellness strategy. Nido provides a wide range of milk and milk-
based products for children at various stages of development. Its products include instant dry whole
milk enriched with vitamin A and D. Nido has been in existence for at least 70 years.

Nestlé also sells a wide variety of ice cream product at various price point including both low
cost and high cost options. In 2018, this category accounted 14.5 % of Nestlé sales and generated
approximately CHF 13.2 billion in revenue. Nestles Purina brand includes a wide range of pet care
products such as Pro Plan, Purina ONE, Gourmet and Merrick among others. With a focus on
nutritional value the company has continued to improve its core products. Nestlé’s pet care products
accounted for approximately 14 % of its total sales in 2018 generating CHF 12.8 billion in revenue.
This Nestle product category includes several ironic brands that cater to regional and local taste such
as Maggi, Stouffer’s ad Buitoni. The company is working hard to incorporate more natural and
healthy ingredients into its products in this category. This segment accounted for 13.2 % of Nestles
net sales in 2018 and generated CHF 12.1 billion in revenue. Apart from Nestlé’s ironic global brand
Kit Kat, the company has introduced several more local brands in this category. In 2018, this
category accounted for 8.9% of Nestlé’s net sales generating CHF 8.1 billion in revenue. Nestles Pure
Life is the world’s largest bottled water brand with a global presence in multiple markets.

Nestles headquarters are in Switzerland. However the brand also has regenola offices all
over the world. It has also segmented. Its business into three major zones based on geographical
markets. The American, Oceania and sub-Saharan Africa are divided into these zone (AOA). The
Americans are the bard’s largest zone accounting for the majority of it sales and revenue. In 2018,
both North Americas generated a total of CHF 31.0 billion in revenue with the United States and
Canada accounting for CHF 20,540 million. In addition, the company has approximately 30 product
technology and research and development centres on the world. Nestle employs the FMCG
distribution strategy of breaking the bulk. Nestlé’s typical distribution strategy is as follows. Nestle
has two different type of distribution. It’s typical of any fast-moving consumer goods (FMCG)
company. The Nestle channel on the other hand as well known for being robust with a strong
marketing and sales network distribution. Nestle also regularly introduces trade discounts and other
tactics to keep the channel motivated. The main issue is the distribution of Maggi, which is the most
popular products along with Nescafe. Nestle is able to drive other products in the market as a result
of these two products. As a result, if the distributor purchases one weak product, he or she may
receive a discount in the stronger product or vice versa. Nestle challenge is in the chocolate
segment, where it faces stiff competition from Cadbury making it difficult to sell the chocolate. Kit
Kat has its own brand from positioning but is not superior to Dairy milk. Thus, converting retailer to
sell Nestle rather than Cadbury is Nestlé’s most difficult task.

The food and beverage industry has become increasing competitive. In this day and age of
fierce competition, pricing is critical in both marketing and sales. Nestle has employed a diverse
pricing strategy. It has introduced products ranging in price from affordable to premium and super
premium. While Nestlé’s primary target market is the middle-class consumer, the company has also
introduced several products aimed at the upper end of the market. Its Natural BLISS Artisan Café
creamer is aimed at the super premium market while several other products are priced reasonably
for the middle-class consumer. Nestlé’s pricing strategy varies according to geographical market,
packaging and target market. The price of each individual product is determined by the market. For
example, Nescafe and Maggi which are clear market leaders are priced with higher margins for the
company than the competition. This is because the product quality is adequate and a slight price cut
will not cause the consumer to switch brands. Nestles pricing strength stems from its packing or
consumption based pricing. Nestle provide a wide range of size and packaging options for Nescafe

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and Maggi. In supermarkets, we can even find 16 packet of Maggi where’s in small retail shops can
only find 5 packet of Maggi.

Nestle is a globally recognised brand. It does however use a variety of marketing channels to
promote its brands and products. In addition to digital marketing, it promotes its brands through
social media and other promotional channels. In recent years, it has increased its emphasis on
innovative marketing in order to increase sales and revenue. It portfolio includes several well-known
brands. However, the company is also working to expend its online presence and invest in e-
commerce. Nestle has used e-commerce as a sales and marketing channel. In 2018, the e-commerce
channel accounted for approximately 7.4 % of Nestles net sales. The Nescafe tune is one of the most
well-known. It was one of the most effective advertising campaigns and it was launched at least two
decades ago. However, that campaign significantly increased Nescafe’s market share. Nestles brand
on the other had was pushed by Maggi’s excellent product quality and witty and innovative
campaigns. Where Nescafe is emphasises value and the good things in life, Maggi emphasises the
moments you shared with your Maggi. The most recent campaign was entirely focused on the Maggi
story and participants were required to come up with various innovative ways to consume the
Maggi. Promotion for other products are also done cleverly. Kit Kat emphasises “Take a Break” and
has done some good marketing for it. Kit Kat website too is very intensive showing nothing but
inviting visitors to take a break enjoy a Kit Kat. A FMCG company’s major push is expected to be in
sales promotion at the ground level. Nestle excels in this category. Nestle focuses on its strengths
which are Maggi, Nescafe and Kit Kat which are the most promoted brands on the ground level in
the market. Nestle also employs TV commercial and ATL marketing on a regular basis. It’s also
available online thanks to some clever marketing. Overall, Nestle is a brand with strong product and
marketing and as a result the brand has a very high brand recall value.

The public become more aware of the product during the growth stage as sales and revenue
increase and profit begin to accrue. The growth stage is the time when the product gradually and
steady gains acceptance among customers, the industry and the general public. During this stage,
the product or innovation gains markets acceptance and as a result sales and revenue begin to rise.
Profits begin to flow through the break-even point is unlikely to be reached for some time perhaps
not until next stage depending on the cost and revenue structures. RIG was 6.0% with organic
growth of 7.6 %. Pricing increased by 1.6 % in the second quarter then accelerated to 2.1 % in the
third quarter. Growth was widespread across most geographies and product categories. Organic
growth in development market reach 7.1 % fuelled primarily by RIG with positive pricing. Organic
growth in emerging markets was 8.3 % driven by strong RIG and favourable pricing. Coffee was the
largest contributor to growth by product category fuelled by strong momentum for the three major
brands Nescafe, Nespresso and Starbucks. Starbucks product increased by 15.5 % with sales totalling
CHF 2.2 billion across 79 markets. Purina Petcare experience double-digit growth driven by science-
based and premium brands such as Purina Pro Plan, Fancy Feast and Purina ONE as well as
veterinary products. Prepared foods and cooking aids grew in the high single digits thanks to strong
sales developments for Maggi, Stouffers and Lea cuisine. Vegetarian and plan-based food offerings
increased by double digits with garden gourmet leading the way in product expansion. Dairy
reported mid-single-digit growth due to steady demand for fortified milk, coffee creamers and ice
cream. Confectionery saw high single-digit growth aided by Kit Kat’s strong sales growth. Nestle
Health Science’s sales increased by double digit reflecting strong demand for consumer care product
particularly vitamins, minerals and supplements. Infant nutrition experienced negative growth
owning to lover birth rate globally as result of the pandemic as well as a sales decline in China.
Outside of China, growth in infant Nutrition was positive in the third quarter. Water saw mid-single-
digit growth in the third quarter with strong demand in North America and emerging market.

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Growth in retail sales was 6.6 % by channel. E-commerce sales increased by 17.2 % accounting 14.1
% of total group sales with strong momentum in most categories particularly coffee, Purina Petcare
and culinary. Out of home growth was 22.8 % aided by further relaxation of movement restrictions
in some geographies.

For a Nestle’s Nescafe product maturity is the point at which people are fully aware of the
existence. This brings in its competitors brands. Except for Bru, there hasn’t been much competition
I the Indian market for Nescafe. HUL own Bru which entered the market shortly after Nescafe. It also
asserted that it provided high-quality coffee. Bru’s unique selling point was that it was India’s largest
coffee brand. Bru targeted almost every demographic including the younger generation. Its
advertisements and promotion were more customer-focused. I focused on bonds and emotion
which drew a lot of attention. Nescafe had to remind its customers of its presence at this point.
Nescafe as a brand has already raised awareness, so what they did was try to connect with their tart
audience. There was no longer any need to promote the product because everyone knew about it
and liked it. S they created campaigns in which people could relate to the brand. Nescafe used
below the line marketing techniques such as celebrity endorsements and sponsorship. I recent
advertisement, popular actors have been endorsing the brand and promoting the fact that they are
drink a cup of Nescafe every day weather in between work or during a conversation. One of their
most recent campaign is “only doing will make it possible”. This campaign makes no mention of the
benefits of Nescafe or Coffee. It focuses on bonding, relationship and how coffee can used as a
conversation starter. They had actor like Deepika Padukone endorse it so they were able to reach
out the younger generation as well. With such campaigns, they have also ventured into social
marketing using Facebook, twitter and of course their own website. Nescafe has also opened
cafeteria and coffee lounges providing its customers with a full coffee experience. They’ve also
cleverly targeted the locations where there café will open. Place near colleges, offices and shopping
malls will attract the greatest number customers.

Nestlé’s Nescafe yet to experience a decline. It is still the market lader and has a strong
presence in its customer’s minds. If it ever reached a declining stage, it must recover using the
methods outlined. When brand reaches a declining stage, it means that it has been surpassed by a
competitor brand in terms of quality, taste, variety, promote and so on. So the first step is to identify
the root cause and then work on it. If the product’s quality or taste has been improved. It must be
relaunced to inform customers that the new product is better, testier richer. It can introduce a
variety of new products which will excite customers and give them something new to look forward.
Nestlé’s Nescafe can collaborate with other Nestle brands to promote itself. Perhaps by making
enticing offers to its customers. Selling the two product as a package. Buyers are always on the
lookout for the best deals. So perhaps the company can offer discount and other enticing offers such
as buy 2 get 1 free, 30 % off or buy 3 set get 1 collection mug. Because it is an old brand it can create
new TV commercials that emphasise brand heritage. Not to forget what happen to Nestlé’s Maggi.
There were some hiccups along the way such as the prohibition of Maggi. Because of the high lead
content as we almost thought our favourite noodle brand was no longer available or it may reached
it final stage which is decline stage. Nestle on the other hand increased its investment in Maggi
research and took corrective action. Internal employee engagement, increased campaign, increased
social media activity and revived back from the near disaster. In term of the current situation, after
the world was hit by the Corona Virus Pandemic, Maggi sales increased by 25% in 2019 as consumers
stayed at home and stockpiled instant noodles. Maggi’s revenue in is expected to rise 8.1% and 8.5
% respectively due to increases in total and domestic sales. Maggi thus escaped death and recovered
well after climbing back from the decline stage.

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 The marketing mix is the basic concept in marketing composed of 4 Ps mainly Place, Price,
production and promotion. Strategic decision that are related to the marketing mix determine the
failure or success of any firm. In Nestlé’s company, these are consume and produced simultaneously.
The consumer are part of the company production process. Beside, since benefits are intangible,
Nestlé’s consumers tend to seek tangible indications that help them understand the nature of
consuming Nestle product. The acknowledgement of the key communication variable between the
consumers and the company has made the company expand its marketing mic to attract its
consumers. To that end, the product, price, promotion and place aspects of the company marketing
strategy were discussed as well as an analysis of the same strengths, weaknesses, opportunities and
threats. Solution for now how to fix flaws in the company marketing strategy have also been
provided. The importance of social media as a marketing channel has also been emphasised. The
marketing mix, when used wisely can help business market their product services efficiently and
successfully. A product life cycle is a model that describes the life cycle of a product in the market.
This cycle has 4 major stage which is introduction, growth, maturation ad decline. Every organisation
must understand the stage of development of its products in order to develop appropriate
marketing strategies for the product’s marketing. Also assists a company in determining when
expect an increase in sales revenue and when to expect intense competition.

Reference

1. Marketing91 (2022) Marketing Mix Nestle

https://www.marketing91.com/marketing-mix-nestle/
2. Nestle (2022) Nestle report nine month sales for 2021
https://www.nestle.com/media/pressreleases/allpressreleases/nine-month-sales-2021
3. Nestle (2022) Nestle Strategy I Nestle Global
https://www.nestle.com/aboutus/strategy
4. Notesmatic (2022) Marketing Mix
https://www.marketing91.com/marketing-mix-nestle/
5. Food Business (2022) Nestle year new product development
https://www.foodbusinessnews.net/articles/15218-slideshow-nestles-year-of-new-product-
development

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Part II

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