Marketing Mix Plan for Nestle - Case Study Example

Marketing Mix Plan for Nestle Author SID MKT103 – Introduction to Marketing Tutor: Executive Summary Without customers, no business can survive. In order to attract and retain customers, every business has to understand the value of marketing. People are not likely to simply walk in to your premises and buy from you if they don’t know who you are or what you are selling. A good marketing plan assists an organization to develop products that meets the market demand. The market place environment has some potential effect on the performance of the company. For instance, the micro environment, which comprises of the publics, can hinder the company’s ability to source funds for expansion. On the other hand, macro environment affects the purchasing power of the consumers and the way they spend their money. Nescafé basically targets coffee drinkers, especially those who are always in need of coffee to stimulate their bodies. As a result of its convenience, it is a solution especially for those who want to enjoy it at home, work or school. Besides, it also targets middle-aged and elderly people who get into the habit of drinking Nescafé. Positioning comprises of an advert such as “beverage for any moment”. This advertisement can be regarded as a persuasion to increase the usage of the product. The marketing mix adopted in the plan comprises of the product, the price, promotion and place. The plan covers a period of one The company adopts, Return On Market Investment, Return On Investments (ROI) and Return on Marketing Objectives as a way of evaluating the effectiveness of the marketing plan. A market plan can assist the organization to targets its customers, boost its customer base and at the end increase its bottom line. It assists in developing the products and services that meets the needs of a target market. Table of Contents Executive Summary 2 Table of Contents 4 Nestle will follow the FMCG strategy of distributing its products into the market by breaking down the bulk. The company will follow the following distribution strategy. 7 Example of distribution model 8 Implementation & Schedule 10 Marketing Mix Strategies Product/Service Chocolate is one of the leading products ever produced by Nestle, with the most popular being Munch, Nestle Kitkat, Polo, Milky bar and Eclairs. Another product is Nescafe, which is the classic instant coffee with the best quality made from carefully selected coffee beans and delivered in various sizes ranging from 200gr glass jars to 5gr sachets. It is a medium-dark roast that provides a full flavour and offers a refreshing taste. Nescafe offers product support and after sale service with a mailing address, phone number, customer support, Twitter and Facebook pages on its website. It is a combination of NESTLE and café; ‘Nes’ meaning miracle and ‘café’ meaning coffee-miracle with coffee. Nescafe Classic can be classified into a consumer product class and is a very convenient product. Consumers buy it immediately, frequently, and with least comparison and buying effort. Nescafe is very compatible with an individual’s life and everyone who has not tested it can incorporate it into daily life with ease. Other products offered by Nestle Company include: Milk and Milk products – these include such products as Nestle Milk maid, Nestle slim and Nestle everyday Cooking aides and prepared dishes– Nestle has another category of products which comes into cooking aides and prepared dishes. One of the major cash cows of Nestle lies in this segment, which is Maggi. As it can be seen, Nescafe and Maggi are two products that contribute to the company’s Brand equity The significant factor in Nestle is that there is the quality maintenance of its products, and there are few complaints regarding the company’s products in the market. This is one of the milestones especially for a company that relies majorly on food products Price The price adopted by Nescafe depends on the market of every individual product. For instance, Nescafe and Maggie being the leaders in the market are priced with relatively higher margins for the company as compared to other competitors. This comes as a result of good product quality, and any skimming price will not make the consumer to switch the brands. In the case of market entry strategy, Nescafe is using market skimming strategy when they are entering a new market. This is because they believe that their target coffee consumers belonged to an upper class, after which the success of this strategy they can lower the prices so that they can target the middle class. For the case of establishing products, the company focuses on maintaining prices. This is because the competitors are very weak when it comes to market share. Therefore, this gives Nestle an edge on competitors to sustain prices, especially when introducing a new product into the market. Promotions One of the famous tunes is the Nescafe tune that was one of the best advertising campaigns launched for the last twenty years. Nonetheless, that campaign made Nescafe very competitive and widely known in the market. On the other hand, the company’s brand was also pushed by the exceptional product quality of Maggi and humorous and innovative campaigns of Maggi. Where Nescafe focused so much on the value and the good things in life, Maggi, on the other hand, focused on the good moments you had with your Maggi. The advertisement that had the slogan “Beverage for any Moment” acted as one of the persuading tools so as to increase the usage of the Nescafe product. Also, the recent campaign was totally focused on your Maggi story, where several people had to device various new ways that they had their Maggi. In addition to Nescafe, promotions for other products are also done in a smart manner. For instance, Kitkat majorly focuses on “Take a break” and has done some substantive marketing for the same. Kitkats website is also very innovative and displays nothing but requests a visitor to take a moment and enjoy a Kitkat. Nestle majorly focuses on its strength which is Nescafe, Maggi and Kitkat, which are the widely promoted brands in the market especially on the ground level. Apart from this, a major portion of Nescafe’s promotion strategy also involves the use of, Newspapers, Advertising Campaigns, Television, The Internet and Public relation activity. Nestle is a brand with strong products and also marketing. Thus, the brand has high recall value. Another strategy adopted by Nescafe is excellent branding that is used to build high brand value for end customers. Nescafe’s logotype has always been the same since its inception besides some packaging and product changes. Place Nestle will follow the FMCG strategy of distributing its products into the market by breaking down the bulk. The company will follow the following distribution strategy. Manufacturing C&F agent Distributors Retailers Consumer Manufacturing Bulk buyers Consumer The company adopts the two forms of distribution in distributing its products into the market. It is common for any FMCG company. Nonetheless, this channel of distribution is strong when there is good sales network and marketing for channel distribution. Above it, Nestle regularly introduces trade discounts and several tactics so as to keep the channel motivated. The only challenge lies in the distribution of Maggi, which is one of the most demanded products together with Nescafe. Because of the two products, Nestle can drive other products into the market as well. Therefore, when one buys a weak product, a distributer might be given a discount on the stronger product or the other way round. The only challenge facing Nestle is the chocolate segment that faces tough competition from such companies as Cadbury, therefore, selling chocolates is difficult. Kitkat may have its brand positioning, but may not be better as compared to Dairy milk. Therefore, making retailers sell Nescafe instead of Cadbury is a challenging task for Nestle. This is mainly achieved through promotions. Example of distribution model Evaluation and Control Marketing plan metrics comprises of data points used in assessing the success or failure of a marketing plan. It assists you to know whether you have chosen the right marketing activity. Some of the metrics used to measure the effectiveness of a marketing plan include: Return On Market Investment (ROMI) - this measures how marketing spending leads to profits Return On Investments (ROI) - it measures company’s sales and profits Return on Marketing Objectives (ROMO)- it helps in ensuring that every revenue per dollar is spent on each market activity in accordance to marketing objective Evaluation of Marketing Goal/Objective Metric Method of Measure Timing Responsibility Outcome A Outcome B Return On Marketing Investment (ROMI) Measure performance activities across the marketing mix 1 year Marketers High profits High profits Return On Investments (ROI) Measures company sales and profit 1 year Marketers Increase in sales Increase in profits Return on Marketing Objectives (ROMO) To measure the effectiveness of marketing campaign 1 year Managers Revenue per dollar Revenue per dollar Implementation & Schedule Conclusion and Recommendations Nestle is one of the leading nutrition, wellness and health companies in the world with its headquarters in Switzerland and is also the leading company when it comes to revenues. The company has unmatched products and brand portfolio with distribution channels and geographical presence in over 100 countries. It also has the good brand reputation of its products valued at over $7 billion. Also, Nestle has invested over $2 billion in R&D capabilities. On the contrary, the company has not been able to offer consistent quality food product with some being recalled as a result of poor quality supplies or food contamination. The company is also being criticized over the implementation of its CSR activities. Some of the most popular products of the company comprises of Munch, Nestle Kitkat, Polo, Milky bar and Eclairs, Milk and Milk products, Cooking aides and prepared dishes. The price adopted by Nescafe depends on the market of every individual product. In the case of market entry strategy, Nescafe is using market skimming strategy when they are entering a new market. As for the case of establishing products, the company focuses on maintaining prices. Nescafe’s promotion strategy also involves the use of, Newspapers, Advertising Campaigns, Television, The Internet and Public relation activity When it comes to distribution, Nestle will follow the FMCG strategy of distributing its products into the market by breaking down the bulk. Due to the demand of healthier food products in Australia, Nestle should try to introduce healthy products so as to respond to the increasing demand. It should also aim at acquiring some start-ups that are majorly specializing in production of well-being products to expand its portfolio Reference List Govindarajan, m. ( 2007). Marketing management. Phi learning pvt. Ltd. Read More