Chapter 1

Introduction to Marketing strategy

Definition
Developing a strategy
Types of Strategies

Introduction

Marketing strategy is the goal of increasing sales and achieving a sustainable

competitive advantage. Marketing strategy includes all basic and long-term
activities in the field of marketing that deal with the analysis of the strategic initial
situation of a company and the formulation, evaluation and selection of marketoriented strategies and therefore contribute to the goals of the company and its
marketing objectives.
The strategic management process is based on the belief that organization should
continuously monitor internal and external events and trends so that timely change
can be made as needed. An organization must be capable of wisely identifying and
adapting to change. In this report, I will choose Nestl S.A, one of the most
successful food processing company in the world to discuss its strategy
management process.

Definition
An organization's strategy that combines all of its marketing goals into one
comprehensive plan. A good marketing strategy should be drawn from market
research and focus on the right product mix in order to achieve the maximum profit
potential and sustain the business. The marketing strategy is the foundation of a
marketing plan.

Developing a marketing strategy

Marketing strategies serve as the fundamental underpinning of marketing plans

designed to fill market needs and reach marketing objectives. Plans and objectives
are generally tested for measurable results. Commonly, marketing strategies are
developed as multi-year plans, with a tactical plan detailing specific actions to be
accomplished in the current year. Time horizons covered by the marketing plan
vary by company, by industry, and by nation, however, time horizons are becoming
shorter as the speed of change in the environment increases. Marketing strategies
are dynamic and interactive.

Marketing strategy involves careful and precise scanning of the internal and
external environments. Internal environmental factors include the marketing mix
and marketing mix modeling, plus performance analysis and strategic constraints.
External environmental factors include customer analysis, competitor analysis,
target market analysis, as well as evaluation of any elements of the technological,
economic, cultural or political/legal environment likely to impact success. A key
component of marketing strategy is often to keep marketing in line with a
company's overarching mission statement. Once a thorough environmental scan is
complete, a strategic plan can be constructed to identify business alternatives,
establish challenging goals, determine the optimal marketing mix to attain these
goals, and detail implementation. A final step in developing a marketing strategy is
to create a plan to monitor progress and a set of contingencies if problems arise in
the implementation of the plan.

Marketing Mix Modeling is often used to help determine the optimal marketing
budget and how to allocate across the marketing mix to achieve these strategic
goals. Moreover, such models can help allocate spend across a portfolio of brands
and manage brands to create value.

Types of strategies

Marketing strategies may differ depending on the unique situation of the

individual business. However there are a number of ways of categorizing some
generic strategies. A brief description of the most common categorizing schemes is
presented below:
Strategies based on market dominance - In this scheme, firms are classified
based on their market share or dominance of an industry. Typically there are four
types of market dominance strategies:
Leader
Challenger
Follower
Nicher
According to Shaw, Eric (2012). "Marketing Strategy: From the Origin of the
Concept to the Development of a Conceptual Framework". There is a framework
for marketing strategies.
Market introduction strategies
"At introduction, the marketing strategist has two principle strategies to choose
from: Penetration or Niche".
Market growth strategies
"In the early growth stage, the marketing manager may choose from two
additional strategic alternatives: Segment Expansion or Brand Expansion.

Market maturity strategies

"In maturity, sales growth slows, stabilizes and starts to decline. In early
maturity, it is common to employ a maintenance strategy (BCG), where the firm
maintains or holds a stable marketing mix"
Market decline strategies
At some point the decline in sales approaches and then begins to exceed costs.
And not just accounting costs, there are hidden costs as well; as 'No financial
accounting can adequately convey all the hidden costs.' At some point, with
declining sales and rising costs, a harvesting strategy becomes unprofitable and a
Divesting Strategy necessary"
Early marketing strategy concepts were:
"Differentiation And Segmentation Strategies"
Approach under which a firm aims to develop and market unique products for
different customer segments. Usually employed where a firm has clear competitive
advantages, and can sustain an expensive advertising campaign. It is one of three
generic marketing strategies (see focus strategy and low cost strategy for the other
two) that can be adopted by any firm. See also segmentation strategies.
The process of defining and subdividing a large homogenous market into
clearly identifiable segments having similar needs, wants, or demand
characteristics. Its objective is to design a marketing mix that precisely matches the
expectations of customers in the targeted segment. Few companies are big enough
to supply the needs of an entire market; most must breakdown the total demand
into segments and choose those that the company is best equipped to handle.
"Skimming And Penetration Strategies"

"With skimming, a firm introduces a product with a high price and after milking
the least price sensitive segment, gradually reduces price, in a stepwise fashion,
tapping effective demand at each price level. With penetration pricing a firm
continues its initial low price from introduction to rapidly capture sales and market
share, but with lower profit margins than skimming".
There are also corporate strategy concepts like:
"SWOT analysis"
"Although widely used in marketing strategy, SWOT (also known as TOWS)
Analysis originated in corporate strategy. The strategy is all about identifying
strengths, weakness , opportunity an threats.
"Growth Strategies"
"The most well-known, and least often attributed, aspect of Growth Strategies
in the marketing literature is the term 'product-market.' The product-market
concept results from new and existing products with new and existing markets in a
two by two matrix".
Porter's "generic strategies"
Porter generic strategies strategy on the dimensions of strategic scope and
strategic strength. Strategic scope refers to the market penetration while strategic
strength refers to the firm's sustainable competitive advantage. The generic strategy
framework (porter 1984) comprises two alternatives each with two alternative
scopes. These are Differentiation and low-cost leadership each with a dimension of
Focus-broad or narrow. ** Product differentiation ** Cost leadership
Market segmentation

Innovation strategies This deals with the firm's rate of the new product
development and business model innovation. It asks whether the company is on the
cutting edge of technology and business innovation. There are three types:
Growth strategies In this scheme we ask the question, "How should the
firm grow?". There are a number of different ways of answering that
question, but the most common gives four answers:
Horizontal integration
Vertical integration
Diversification
Intensification
These ways of growth are termed as organic growth. Horizontal growth is whereby
a firm grows towards acquiring other businesses that are in the same line of
business for example a clothing retail outlet acquiring a food outlet. The two are in
the retail establishments and their integration lead to expansion. Vertical
integration can be forward or backward. Forward integration is whereby a firm
grows towards its customers for example a food manufacturing firm acquiring a
food outlet. Backward integration is whereby a firm grows towards its source of
supply for example a food outlet acquiring a food manufacturing outlet.
Prospector
Analyzer
Defender
Reactor
Marketing warfare strategies This scheme draws parallels between
marketing strategies and military strategies.
Chapter 2
Nestle company Profile
Objectives of Nestle
Nestle India

 Balanced portfolio with leading brands

Market segments
SWOT Analysis of Nestle

Nestle Is The Worlds Largest Food Processing Company Marketing Essay

COMPANY PROFILE

Nestl S.A. is the worlds largest food processing company and is headquartered in
Vevey, Switzerland. The company was founded by Henri Nestl in 1866. Nestl
Company had made several name changes from 1866 to 1947, and finally adopted
Nestl S.A. in 1977 as the companys name. Nestle S.A. has factories or office in
almost every region of the world and markets a wide range of brands. The
company is often described as "the most multinational of the multinationals." in the
current food industry market.

Henri Nestl, also know as of the main originator of condensed milk. In 1867, he
developed the first milk food for infants and a baby who could not be breast-fed
was rescued. Nestls invention responded to the need for a nutritionally safe
alternative to breast milk. Thus, Nestl S.A has targeted to build a business based
on sound human values and thoughts.

The key to success of the company is due to its huge Research and Development
network within the food processing industry. With R&D as the competitive
advantage, Nestl has become the worlds leading nutrition, health, and wellness
company. The company is devoted in continuing to improve the nutritional value
of their products while enhancing the flavor. Nestl achieves this through its brands
and with initiatives like the Nutritional Compass and 60/40+. Millions of people
choose to consume Nestl products everyday because the company sustain the
quality as the fundamental ingredient in all of its brands. Consumers choose to
place their trust in Nestl due to the companys dedication to achieve distinction
and turn to Nestl brands to preserve nutritional balance in todays fast paced
world.

Switzerland-based Nestl S.A. has the highest ranking as the largest player
throughout the entire world in the competitive position within the food industry.
The rating reflects the companys competitiveness and market attractiveness. With
combined sales of 110 billion (Swiss Franc) in 2008, Nestl states a diversified
business portfolio, being the market leader in numerous product categories
worldwide including bottled water, instant coffee, milk and cheese products,
nutrition and baby food, ice cream, frozen foods, culinary preparations, and coco
products. Nestl's broad geographic coverage includes North America and Europe
as well as Asian markets.

The vision of Nestl R&D is long term, it helps shape the future of foods making
consumer needs into research priorities and convert new technologies into
consumer benefits, and services.

OBJECTIVES
Nestls purpose is to offer safe, tasty, convenient and nutritious foods to improve
health and well-being of consumers of all ages all over the world. To meet the
needs and desires of todays and tomorrows consumers, Nestl is strongly
committed to Research and Development (R&D) to improve existing products and
develop new foods with specific health benefits.

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 Nestle India
Nestl India is a public listed company
Nestl SA holds 62.76% share
Market capitalisation INR 402 bn

Balanced portfolio with leading brands

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Milk products and

nutrition (45%)

Prepared Dishes and

Cooking Aids (29%)

Chocolates and
Confectionery (13%)

Beverages (13%)

Market Segmentation
For getting the maximum market share and respect of the product in
the minds of the consumer, as per observation it is been concluded that
Nestle segmentation is based on two points.
-Geographic Segmentation
-Demographic Segmentation
- Geographic Segmentation
The company has divided its geographic segmentation in several regions.
First they have the segmentation of a whole country and from each
provincial capital, they divided its areas into north, east, west, south. So that

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it could be easy for the company to work efficiently on its supply chain
management.
- Demographic Segmentation:
Nestle isnt a supreme quality product that only the high class uses. The
product is for all classes. Infant to seniors. There is no age, sex, income and
any other kind of limitation on use of the product. The product is for all.
Anyone can use the product as per need.

Products of Nestle
Milk Products
Nutrition Products
Prepared Dishes and Cooking Aids
Beverages
Chocolate
Confectionery
Energy Drinks
Instant Noodles

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 SWOT ANALYSIS IN NESTLE

Environmental scanning has the management scan internal environment and

external environment. The factors which are the predominant factor for an
organization factor is SWOT standing for strengths, weaknesses, opportunities and
threats.

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 Internal Environment
Strengths : BRAND STRENGTH: Quality brands and products ; Top selling brand:
Nescafe, Maggi, Kit Kat, Honey Stars, Pepsi and etc.

PRODUCT INNOVATION:
Continuously introducing new products & manufacturing is efficiency. Strengths
include anything a company does well and its resources and capabilities for
developing a competitive advantage. The greatest strength of Nestl is culture that
is team focused and an open door policy. Nestl focuses on collectivism and
performance orientation attitude which encourages employees to work harder.

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Nestl achieves broader range of products by improving existing and innovating

new products. Consumer demands are switched to changes of taste, colours and
design that have been undertaken to products such as Nestls Smarties and Kit
Kats. The launch of Kit Kat Chunky has proven that creativity and innovation can
extend the life cycle of a product.
Strengths Parent support
Company Image
High Quality Products
Well-developed strategy
Market Share
Good marketing skills and services
Brand strength
Research & Development Team
Product innovation
HR department
RESEARCH & DEVELOPMENT CAPABILITIES: have the largest R&D
network of any food company in the world, with 32 R&D centres and over
5,000 people directly involved in R&D
MARKET SHARE: high level of market share and that people all over the
world trust and recognizes Nestle as a big brand name.
Weaknesses
The lack of certain strengths and things a company does not do well are viewed as
weaknesses. Nestl is poor in targeting some of its products.
Nestl MilkPak is a premium product targeted to upper middle and high class
consumers. Most consumers in India are from lower middle and poor class. They
are not afford to purchase it due to the premium price.

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Nestl has a complex supply chain configuration too and traceability is a critical
issue for Nestl India. High standards of hygiene, quality of edible inputs and
workforce are required in the food industry. Fragmented nature of the Indian
market will cause more problems.
Less Proactive : Nestle being a company is less proactive they create changes
but usually unless competitor doesnt change they doesnt adopt a change.
Limited Distribution Channel : Nestles major & bad factor is the limited
distribution channel because they distributes their products to whole seller in their
own factory vehicles as compare to their major competitor they have limited
distribution channel but they are maintaining to penetrate the market as far.
Mature markets : Nestle is entering into markets that are already mature and can
give a tough competition to new entrants
Supply Chain : complex chain management

External Environment
Opportunities
The external environmental analysis a firms new opportunities for profit and
growth. Nestl has a great opportunity for expanding its milk products because
India is the seventh major milk producer in the world with annual output more than
22 billion litres.

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Support from Foreign Investors :- Government support foreign investors to invest

in India which eventually is the opportunity for Nestle.
Enhance Distribution Channel :- Nestle should be working on the distribution
network to enhance the companys network against its competitor.
Changing Social Trend :- Consumers in urban areas now adopt Western lifestyles,
especially the younger generation which is hugely influenced by the Western
media. Younger consumers tend to follow Western life style. There was an increase
in demand for Nestle products over the review period.
Health conscious :- Increasing health and hygiene awareness among people has
greatly increased sales of nestle products. Both the government and the media have
started health awareness campaigns to make Indians realizes that consumption of
Nestles hygienic products is as essential as eating food. Fruit/ juices & eatable
products are doing very well in both urban and rural areas.
Market growth :- Nestle market expands very fast. A new research proves that in
future every person use 85.5 liters juices per years & uses more hygienic products
because of the low hygienic conditions of the environment.
Health-based products- transition to Nutrition Company
Threats
Adjustments in the external environment present threats to a firm. For an example,
shifts in consumers preferences. The major threats to Nestls products is
Unilevers Walls, a famous ice-cream brand. It is distributed nationwide and has
total control within the local market. Besides, economic slowdown can reduce
demand, and inflation is getting higher and higher causing the purchasing power of
consumers is decreasing day by day.

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Government Regulation :- They face problem if government employ taxes

on them which force them to raise the price of their product.

Increase in Competition among Competitor :- Competition among

competitors is major threat to Nestle which can be controlled by the help to
retaining more customers & making more loyal ones.

No Entry Barrier :- There are no many entry barriers so a large numbers of

local companies enter in various Nestles product market.

Unfavorable Changes in Consumer Demand :- With the increase in the

competitors there will be a increase in the number of related products which
eventually harm the Nestles market. Due to which the consumers demand
pattern fluctuate.

Loss of Market Share :- When the market saturates the loss of the market
share of Nestles products is there major threat to Nestle.

International Marketing Standards; Changing Consumer Trends

Sector Woes :- Rising prices of raw materials and fuels; Increasing

packaging and manufacturing costs
Chapter 3
Marketing philosophy nestle adopted
Strategies of competitive advantage
Sales strategy of Nestle
Sales promotion Strategy
Market Segmentation
Positioning strategy

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MARKETING PHILOSPHY NESTLE ADOPTED:

Nestle vision is to be the leading food & beverage company in the world
providing customers with healthy food at affordable prices. Their logo is
Good Food for GOOD LIFE; there all products are for society welfare. So
according to their logo and mission statement it is very fair to say that they
are following the Societal Marketing Concept.

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 STRATEGIES FOR COMPETITIVE ADVANTAGES:

Every product on the shelf, every service and every customer contact helps
to shape this image.
A Nestl brand name on a product is a promise to the customer that it is safe to
consume, that it complies with all regulations and that it meets high standards of
quality. Customers expect us to keep this promise every time. Under no
circumstances will we compromise on the safety of a product and every effort must
be made to avoid hazards to health. Likewise, compliance with all relevant laws
and regulations is a must and is not negotiable. People, equipment and instruments
are made available to ensure safety and conformity of Nestl products at all times.
The effort is worth it. Companies with huge quality standards make fewer
mistakes, waste less time and money and are more productive. They also make
higher profits. Quality is our most successful product. It is the key to our success,
today and tomorrow.

The customer comes first

We want to win and keep customers: distributors, supermarkets, hotels,
shopkeepers and the final consumers. They have very different requirements. Trade
customers expect excellent service, correct information and timely delivery.
Consumers consider taste, appearance and price when they make their choice. Our
task is to understand what customers want and respond to their expectations
rapidly and effectively. We serve various groups of consumers and there is demand
for products at different levels of perceived quality and price. All customers,

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however, expect value for their money good quality at a reasonable price. When
offering quality to customers we also mean environmental quality. Nestl shares
societys concern for the environment and is committed to environmentally sound
business practices throughout the world.
Customers are central to our business and we must always respect their needs and
preferences.
Quality is a competitive advantage
We live in a competitive world and must never forget that our customers
have a choice. If they are not satisfied with a Nestl product, they will switch to
another brand. Our goal, therefore, is to provide superior value in every product
category and market sector in which we compete.
The pursuit of highest quality at any price is no guarantee for success, nor is a
single-minded cost-cutting approach. Lasting competitive advantage is gained from
a balanced search for optimal value to customers, by simultaneous improvement of
quality and reduction cost.
Success can never be taken for granted. We must watch and learn from our
competitors. If they do something better, we must improve our own performance.
We can achieve competitive advantage through Quality.
Quality is a joint effort
Operating companies are fully responsible for maintaining agreed quality
standards. Not only Production units, but also Marketing, Purchasing, Distribution
and Sales have a vital role to play in providing quality to customers. This implies a
thorough knowledge of the products and services we offer

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Quality units at different levels of the organization provide specific support,

promote quality awareness, assume guardianship and audit the system. Quality
departments monitor operations against agreed standards and must intervene in
case of non-conformity.
Quality is made by people
Adequate equipment, procedures and systems are needed to make Quality; so are
involved and dedicated people. Each and every Nestl employee must do his best
to provide quality products and services.
Training and teamwork are crucial to the successful implementation of high quality
standards. Continuous training ensures that everyone understands his tasks and has
the necessary skills to carry them out. Teamwork allows us to achieve results that
are greater than the sum of individual efforts. We motivate employees by
demonstrating management commitment to Quality, by setting challenging goals
and by giving them responsibility and recognition. It is through employee
involvement that goals and targets can be achieved in the shortest time. Quality
must be a way of life for everyone in the company.
Quality is action
Quality is the result of deliberate action. It is the responsibility of senior managers
to communicate the quality objectives and to provide the resources necessary for
their implementation. It is then up to all employees to make Quality happen
throughout the company. Progress is followed by listening to our customers and by
measuring our performance. Shortcomings and mistakes must be analyzed and
corrected. Problems must be anticipated and prevented before they occur. We also
must identify and take advantage of opportunities. To stand still is to fall behind.

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So we must strive for continuous improvement in every area. It is through many

small improvements as well as through major breakthroughs that we will achieve
excellence.
SALES STRATEGY OF NESTLE:
The sales strategy which Nestle adopted is Availability & Visibility. To increase
sales and gain profit the company has to provide proper supply of product in the
market. All the time company remains busy to make the availability of their
product in the market. In departmental stores and shops the is so placed that it is
visible for the customers.

SALES PROMOTION STRATEGY:

Personal Selling: A direct Vendor Selling Activity was coordinated and
carried out during the summer months of June, July, and August. The brand
got great mileage out of this innovative idea of personal selling in terms of
brand awareness, paid trial, image as well as real sales.
Sales Promotion: Specific promotions of Nestle were arranged in some of
the key outlets. Elaborate shelf space was acquired for product display
Regarding trade promotion, the retailer was also given an additional discount

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of 4 % during this sales promotion. Not only did the sales of Nestle grow
tremendously during the promotion, these continued at a higher pace even
after it was over.
Public Relations:
As far as the public relations is concerned, The organization releases an
annual report which includes the company's financial statements along with
the sales of all product categories. The annual report is mainly aimed at the
stockholders. However, another very important form of public relations are
the newsletters and bi-monthly magazines issued by the organization. A
huge amount of information is found in these regarding the products and
their promotion. In the same way, Nestle was given quit a bit of importance
in the newsletters issued after its launch, which obviously helped in creation
of the awareness of this brand.
Besides these promotional methods, word of mouth, a major factor in India proved
to be very effective in the increasing sales of Nestle Pure Life.

MARKET SEGMENTATION:
To occupy a clear distinctive & desirable place related to competing mineral water
in the minds of the target customers Nestle segments its market on two bases:
Psychographic Segmentation
Demographic Segmentation
Geographic Segmentation
Behavioral segmentation

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TARGET MARKET
targeting strategy of nestle is differentiated marketing
nestletargets both genders
targets the upper and middle class people who are health conscious
tourists are also the target market

GEOGRAPHICAL SEGMENTATION:
The Company segments its market geographically on divisional basis. They divide
each division in different zones and every distributor is restricted to sale its
products only in his own zone.
E.g. Dividing into five zones like East, West, South, North, and South west.

DEMOGRAPHICAL FACTOR:
If we look nestles demographic segmentation than we will find that our product is
for every one. People from any area, any culture, any age, any sex, any belief and
any incomemay use the products due to reasonable pricing. It is not any luxury
item which is used by a specific people.
TARGET MARKET:

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A specific demographic target market was not chosen for products like nestea ,
Nescafe, but the products such as cerelac were made only concentrating by
concentrating the kids and their health.
SELETING TARGET MARKET
Target Market Strategies
Undifferentiated mass market.
Differentiated Segmented Marketing.
Concentrate Marketing.
Micro marketing or Individual Marketing.

POSITIONING STRATEGY:
There are some competitive advantages or important attributes of, occupying in
consumer's mind relative to competing mineral waters are as follows:
NESTLE LOGO & FAMILY BRAND:
Nestle brand name and the logo of Nestle is also showing family care to consumer
which is enough to attract the customer. That's why customer gives it preference on
other products.

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 COMMUNICABLE:
Nestle is a brand of nestle which shows a big sign of quality to customer. Due to its
brand name it is very easy to communicate.

Chapter 4
Marketing Environment
Branding strategies of Nestle
Labeling strategies of Nestle
Product Life Cycle
Price Fixation Strategy
Channel of Distribution

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 MARKETING ENVIRONMENT:

1) Internal environment
2) Micro environment
3) Macro environment

1) Internal Environment:
In Nestle Internal environment ensures
o Employees are on side with the goals of an organization.

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o They have direct impact on product quality, dependability and overall

productivity.
o They are internal market, which impact every department within an
organization; a satisfied internal market will be better able to satisfy external
market. Nestle under the supervision of top management runs the
departments of finance, operations, accounting, sales and marketing,
research and development to achieve the goals of organization.
2) Micro Environment:
In Nestle microenvironment includes:
a)Suppliers:
Suppliers provide the resources like labor and material resources to produce goods
and services. They add to customer overall value delivery system. Labor supplies
include handling of

Quantity of labor

Quality of labor

Labor strikes

Labor relations

Material supplies deals with the

Quantity of material

Quality of material

Price of material

Stability of material inputs

Delivery delays

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Nestle efficiently handles the quality, quantity, price and stability of both material
and labor supplies. Management maps out the strategies for labor strikes, supply
shortages and delays to avoid increasing the cost of production, which can badly
affect sales in short run and customer satisfaction in long run.

b) Marketing Intermediaries: It includes the firms that help the company to

promote, sell and distribute its goods to final buyers.
The physical distribution firms determine the ways to store and ship goods
to reach their destination.
Marketing service agencies including marketing research firms, advertising
agencies and media firms are also hired to target and promote product to
right market.
Financial intermediaries like banks, insurance companies helps to finance
transactions and insure against risks associated with buying and selling of
goods.
Nestle works in coordination with marketing intermediaries to make its
product available and visible to its valuable customers.

c)

Customers:

Nestle deals with the reseller customers who buy the product Pure Life to resell at
a reasonable profit.

3) Macro Environment:

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Macro environment include political, cultural, economical factors but as for as

Nestle is concern none of above factors affect on it. Because it is not at luxury item
they are selling necessities of life which can never be affected.
Demographic Environment:
Demographic environment including sex and income also not effect Nestle.
Because majority of edible products are made by nestle. Which remains unaffected
by gender factor. But they take into consideration the age factor majorly.

BRANDING STRATEGY OF NESTLE:

Nestle brand name present a message of caring which make it distinctive and
attractive than other companies. Pure Life's brand is good food for good life. The
message of family protection is enough to get the attraction of customer. The
Nestl's brand name is easy to understand & translate. It is easy to pronounce and it
is also easy to recognize. Another message in brand name is given to customer to
preserve their families from different deceases.

LABELING STRATEGY
Nestl's pure life's label gives all information about their product like ingredients
which are used in it and all instructions regarding product.

PRODUCT LIFE CYCLE:

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If we look Nestle in product life cycle than it easy to judge that it is at introduction
stage. Because Nestle is the market pioneer and at this stage its profit is negative or
low due to low sale and high distribution and promotion expenses.
Other major reason to be at introduction stage is unawareness in rural areas. The
people are not aware to the pure life water thats why their sale is low. They can
brought change in product life cycle by effective promotion, by formulating new
price strategies etc.
PRICE FIXATION STRATIGIES:
These are following objectives of Nestleregarding price fixation:
Profit Earning:
Profit earning is the main objective of every company but in case of nestle their
profit margin is low.
Customer satisfaction:
In Nestle price is not fixed by keeping in mind profit motive, only customer
satisfaction is kept in mind while fixing the prices.

STRATIGIES FOR FIXING THE PRICE:

In nestle prices are set on cost basis as given below:
Price = Cost + Profit
Break even or Target price:
Per Unit Price = variable cost + fixed cost / units of sale

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 CHANNEL OF DISTRIBUTION:
Nestle is making full efforts to supply its product to ultimate consumers. For this
purpose the company uses the conventional marketing channels of distribution to
supply the product. In this method company supply the product to whole seller
who respond it to retailers who supply to ultimate user. In this method Nestle feel
little consumption of time because retailers cannot directly approach up to the
company.

The company also uses the vertical marketing system in which retailers also take
supply from directly company resources without contact with whole sellers. In this
way the margin of company decrease and going into the interest of the ultimate
consumer.

Chapter 5
Communication and advertising
Message to audience
Future Forecast
Nestles role in social welfare
Other strategies

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 COMMUNICATION & ADVERTISING STRATEGY:

Advertisement is a tool to introduce the product in the market. To increase sales

and build an image in the mind of consumer company advertise their product in
different ways, as for as Nestle is concerned company use:
o
o
o
o
o

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Television
Radio
News Paper
Bill Board
Hoarding etc.

o Some time company also makes free sampling, held stalls at different
programs like Health Mela.
o communication strategy is weak

MESSAGE TO AUDIENCE:
In every advertisement the company tries to convey their message like: They
provide health food and health drinking water for caring their customers. We work
for society welfare.

FUTURE FORECASTING OF NESTLE:

In future two competitors of are going to launch their water in the market which
are Pepsi & Coca Cola. As their competitor will advertise their product at very high
stage so people will get awareness about drinking water and Nestle can achieve a

36

great market share in future Because people can see that our water is getting rough
day by day and there is a need for pure drinking water to survive in the world.
For these opportunities company is going to launch an other plant for drinking
water next year.

NESTLEs ROLE FOR SOCIAL WELFARE:

Nestle is not playing any acting role for the welfare of society because their margin
ratio is very less. Nestle profit margin is 5% on the other hand the profit margin of
Pepsi is 60%, Mobilink 55% and Coca Cola has 50%. So they can afford these
huge expenses but Nestle can't afford it.

Other strategy
Nestle will accelerate penetration and increase frequency and develop winning
concepts.
The company focus on both growth and margins.
o NEW PRODUCTS & BUSINESS :- (sell new to same & sell new to new)
o FREQUENCY :- (sell more to same)
o PENETRATION :- (sell same to new)

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Penetration

Frequency

New products

Driving nutrition health and wellness

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Out of home opportunities abound

Winning the distribution and route
To market

Chapter 6
Conclusion
Recommendations and suggestions
Bibliography

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 Conclusion
Nestle is a product for everyone which suitable for all income level since the price
that set by the company is affordable and perhaps, cheap. It is very competitive
since the price is high in quality and most of the consumer does not thinking too
much about the price.
Nestle is the largest company which is in the worlds leading food manufacturer
and the market leader in both coffee and mineral water, produces a wide range of
products including prepared dishes and cooking aids, milk-based products, cereals,
instant coffee and baby foods.

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Nestle is now Out of home abound and Winning the distribution and route to
market. It is now the most trusted products in India especially products like
cerelac, coffee, baby foods and Maggie.
Besides, Nestle is a organic model of organizational design. It is flexible and
highly adaptive to the competitive external environment and also decentralized
decision authority.

RECOMMENDATION AND SUGGESTION:

The company should make huge expenses on advertisement in rural areas of
India to create awareness in the mind of local area's people.
The company should held seminars and meeting for the promotion of Nestle
They have to improve the Marketing strategies. So that they can capture
market and improve their sales.
Nestle is the world leader in FMCG industry. People trust on the products
launched by the company even the product is facing some problems. Nestle

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was doing its good job in past but now it is facing some problems of low
quality of their products. Nestle is sued by someone they claim that they are
doing unethical business. They are mixing unhygienic things which can
cause damage to customers health.
The pursuit of highest quality at any price is no guarantee for success, nor is
a single-minded cost-cutting approach. Lasting competitive advantage is
gained from a balanced search for optimal value to customers, by
simultaneous improvement of quality and reduction cost.
Success can never be taken for granted. Nestl must watch and learn from its
competitors. If they do something better, Nestle must improve its own
performance. Nestle can achieve competitive advantage through Quality.

Bibliography
http://www.businessdictionary.com
www.nestle.in/
en.wikipedia.org/wiki/Nestl
google.co.in

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