Annie Jacobs
Email: 21379726@student.uwl.ac.uk
Student ID: 21379726
THE MARKETING PLAN
ASSIGNMENT II
Nestlé
Principles of Marketing
16/12/2018
Content
Introduction ............................................................................................................................................................ 2
Marketing Mix ..................................................................................................................................................... 3/4
Marketing Analysis (BCG) .................................................................................................................................... 5/6
Marketing Developing Strategies ........................................................................................................................ 7/8
Customer Driven Strategy (STPD) ........................................................................................................................... 9
Conclusions and Recommendation ..................................................................................................................... 10
Referencing........................................................................................................................................................... 11
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To: Nestlé S.A.
Avenue Nestlé 55,
1800 Vevey, Switzerland
From: Annie Jacobs
Ref: Marketing Plan – Baby Formula and Packaging
Date: 16 December 2018
Introduction
The plan is based on the marketing research of primary and secondary data and the issues we have
recognized concerning Nestlé’s unethical marketing on some of the baby formula. The baby milk scandal
report published in 1974 explained how Nestlé caused infant illness and death in less economically developed
countries by promoting bottle feeding and discouraging breast feeding. The baby formula produced by Nestle
had to be mixed with water, which is often contaminated and not clean in developing countries, leading to
disease in vulnerable babies. Nestle.com. (2018). [online] Available at: https://www.nestle.com/csv/impact
[Accessed 16 Dec. 2018].
As per our marketing research since 2016 the company is going through a decline period by -3.65%. The
marketing plan is designed to help Nestlé by recommending how to provide a better nutritional information
on their product labels, in line with government guidelines and recommendations. To improve the market
share and growth with the preferred product to invest like Cerelac baby formula.
The plan aim is to achieve marketing strategy which can be implemented in January 2019 with improved
results expected to be realized by December 2019 and continued to develop through the following 2020 year.
By identifying the company growth opportunities through market penetration, product development and
diversification we are confident that this plan will response to the core issues of Nestlé declined profit.
Sales
Powdered and Liquid Beverages
Water
Milk products and Ice cream
Nutrition and Health Science
Prepared dishes and cooking aids
Confectionery
PetCare
Baby Formula
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Marketing Mix
Product
Nestlé has more than 2000 products from global icons to local favourites. The variety of products are Bottled
water, Breakfast Cereals, Chocolates and Confectionery, Coffee, Dairy Products, Drinks, Food and Purina
Petcare. Their products are of very high quality like distinctive and durable packaging that allow a great
protection of the foods and beverages they use more materials from sustainability and renewable resources.
They have some of the strongest brands that are favourite with the consumers like Gerber baby food, KitKat,
Smarties, Nesquik. Food services providing products like Maggi seasoning to be used by chefs in order to
brings flavour and nutrition of fresh food ingredients. Nestlé continues to improve their recipes to make their
consumers adopt a healthy lifestyle. They focus on ingredients that are nutritious and reduce the sugar in
their chocolates but still have the same great taste.
Nespresso only uses individual capsules coffees created by specialists to meet the quality standards on taste
and aroma. They have their own coffee machine technology that produces the perfect every day cup.
Additional services are offered to consumers who purchase the coffee machines like annual servicing
warranty for three years and breakdown insurance. Nestle.com. (2018). [online] Available at:
https://www.nestle.com/csv/impact [Accessed 16 Dec. 2018].
Price
Nestlé’s products are available at reasonable and affordable prices. They sensibly review prices to ensure that
consumers remain loyal to their brands and don’t select cheaper supermarket products. The prices are
dependent on the market and segmentation of each product and the demands from the consumers. For
example, for Nescafe and KitKat which are the most successful products the variable cost can be different due
to the cost of the production, labour and distribution they offer a lot of sizes and package options in the
supermarkets, we can find KitKat bar of 100gr and KitKat of 200gr. They offer discounts on early settlement
payments and they give credit terms for the purchases. Value-added features and services are implemented in
to the Nespresso coffee machines due to the maintenance and insurance cost for one unit they charge £150
with additional £50 for annual insurance fee. The pricing strategy for the coffee machine is a captive product
pricing when consumers buy the machine, they must purchase the coffee capsules in order to use the
product. Nestle.com. (2018). [online] Available at: https://www.nestle.com/csv/impact [Accessed 16 Dec.
2018].
Place
Nestle make their products available for the consumer by building strong and reliable relationships with their
suppliers, distributors and retailers in the company supply chain. They use two types of channel levels direct
channel and indirect channel this is because the company’s vast amount of manufacturing of products permit
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them to have their own marketing logistics and supply chain management who distribute directly
to retailers this way the convenient products like milk, yogurts, chocolates can reach the
consumer in a fast and efficient way. They use the Indirect channels when they must export larger amount of
goods outside the UK like pet food, bottled water baby formulas that have long life shelf. They use primary
distributor who store the goods in their warehouse who then deliver to the wholesalers and finally to the
retailers like supermarkets. Nestle.com. (2018). [online] Available at: https://www.nestle.com/csv/impact
[Accessed 16 Dec. 2018].
Promotion
Advertisement is important to present the product in the market. Most of Nestle advertising is associated
with the target audience depending which product they want to promote to which segmentation. Baby
formula and milk is advertised in the number one UK magazine “Mother and Baby Magazine”. Chocolates,
beverage and coffee are advertised also through magazines and additional adverts on TV, Radio and Digital
billboards all round big cities and public places. Purina pet food is advertised on the isle of pet foods in every
supermarket and in every veterinary surgery.
Advertising for other products is also done very clever. KitKat focuses on “Take a break” the website too is
very inventive and shows nothing but asks the visitor to take a break and have a KitKat.
The way Nestle advertises its products is through non-personal communication channels they use colourful
images on their cereal boxes and Nesquik decorated with fun and vibrant animated characters that attracts
children and their parents. For the Nespresso TV advert they have used famous Hollywood actor to promote
their product. Nestle.com. (2018). [online] Available at: https://www.nestle.com/csv/impact [Accessed 16
Dec. 2018].
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Marketing Analysis (BCG)
After carefully reviewing the company’s products using the Boston Consulting Group approach,
we have established that the growth rate of some of Nestle’s products are less profitable and the uncertainty
of them must be discussed as a matter of urgency in order to develop a marketing strategy which can be
implemented to improve their market share and market growth for the company. Nestle.com. (2018).
[online] Available at: https://www.nestle.com/csv/impact [Accessed 16 Dec. 2018].
BCG Matrix
High Market Share
High
Low
Ima ges by Googl e.com
Low Market Growth
Stars in the BCG Matrix
Nestle’s top brands like KitKat, Nesquik and Nespresso have the highest market share and market growth this
is due to their popularity among the consumers, their great taste and continues investment in advertising. The
products are very well known to the public and they continue to grow. The strategies for those products are
to continue investment in marketing activities and advertising to increase and retain market share. The money
the company will receive will then be used to improve the market growth towards other products from the
question’s marks and dog category.
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Question marks in the BCG Matrix
Nestle came up with a ground-breaking product like Weetabix and Belvita for more nutritious,
high-quality foods which immediately increased growth rate. However, the market share of those products is
unknown this is because the consumers are not always buying the same products weekly for every day
breakfast, they may choose to have cereal one day and eggs on another and the high competition on the
market is also putting concerns for those products. The products might not be bought anymore due many
other choices on the market. The strategies for this type of products with high growth rate, needs to be
capitalized in a way that question marks turn into high market share products. Market research can be used to
establish and determine the consumer behaviour for those products. Nestle.com. (2018). [online] Available at:
https://www.nestle.com/csv/impact [Accessed 16 Dec. 2018].
Dogs in the BCG Matrix
Unfortunately, one of Nestles products Cerelac baby formula has a very low market share and market growth
even though the product is very good it is not popular on the market for the consumers especially young
mothers. The issues with poor labelling and lack of diverse taste brought this product to stand still and now
make any money currently for the company. Nestle believes in good food and good life and as the biggest
food and beverages company in the world they should invest in this product to bring it to Cash cow stage by
creating additional flavours and improve advertising. Nestle.com. (2018). [online] Available at:
https://www.nestle.com/csv/impact [Accessed 16 Dec. 2018].
Cash Cow in the BCG Matrix
The products in the cash cow matrix Purina, Milo and Crunch bar have high market share and low market
growth. Those products currently are not growing as they have reached maximum gain by generating revenue
due to the high market share. They can use the profit to finance new products or improve growth in other
areas of the business. They do not require high investment but at the same time they give high return which
improve the overall profitability of the company. They are very stable products the strategy for them will be
retention of the market share as the market is not growing, gaining is less and customer retaining is high.
Loyalty programs and other advertising methods form the central of the marketing plan. Nestle.com. (2018).
[online] Available at: https://www.nestle.com/csv/impact [Accessed 16 Dec. 2018].
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Marketing Developing Strategies
By implementing the ANSOFF Matrix Nestle will be able to decide if they will accept our
marketing development strategies designed to help the market share and growth. One of the products we
recommend being improved or invested in is Cerelac by designing a new packaging and improving the formula
content. Cereals is a brand of instant cereal the cereal is promoted for infants 6 months and older as a
supplement to breast milk. The packaging will contain 200g and option of 400g will have clear labels of
Ingredients, Nutrition information and Preparation. There will be additional label added for feeding table
explaining clear instruction how much water to use and how much formula.
Market
Existing
New
Exsisting
Market Penetration
Market Development
Product
Product Development
Unrelated Diversification
New
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Market Penetration
How can Nestle grow Cerelac baby formula? By increasing the sales with the existing product to the existing
market this mean they must concentrate on promotions in all supermarkets. They must choose on the
distribution and packages and how the current group emploees can promote the product. They must improve
the labelling with clear instructions of how to use the product. With clear labelling across the food and drink
market helps consumers become more aware with the format of the labels, which in turn makes it more likely
that they will use the information provided correctly.Clear translation on the labelling is crucial on the
products if they are exported to different countries around the world. Nestle.com. (2018). [online] Available
at: https://www.nestle.com/csv/impact [Accessed 16 Dec. 2018].
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Market Development
By targeting a new market with the existing product Nestle can create different type of Cerelac.
Cerelac Rice, Cerelac Wheat, Cerelac Corn. They will treat the products as brand new with very high quality
and better improved nutritious ingredients. There will be a lot of investment when entering new market
considering the advertisement cost and market for the consumers to get familiar with the product. Nestle
might also need to invest in new facilities, admin and distribution costs. Nestle.com. (2018). [online] Available
at: https://www.nestle.com/csv/impact [Accessed 16 Dec. 2018].
Product development
By investing in developing new Cerlac baby formula with different variety of taste like adding banana
flavoured, apple, honey and strawberries we are very much confident that the product growth will
significantly increase. By designing a new packaging and improving the formula content. This strategy will also
require investment from the company in additional employees, bigger distribution, advertising and promotion
of the new and improved products. Nestle.com. (2018). [online] Available at:
https://www.nestle.com/csv/impact [Accessed 16 Dec. 2018].
Unrelated Diversification
By creating additional unrelated products to Cerelac we are confident that the sales of the product will
dramatically increase for example a T-Shirt logo with the teddy bear will be available for the children between
ages three months and two years old there will be a teddy bear toy attached to each box of Cerelac that will
attract mums and the young toddlers. A feeding baby bottle will also have the image of the teddy bear the
symbol of Cerelac. All those products are important to add additional value to the product.
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Customer Driven Strategy
Segmentation
Marketing segmentation of Nestle, is Geographic and Demographic their target market and positioning
strategy in the UK and all around the World is through a mass marketing.
Geographic area for example their Nescafe Ice is only sold in the countries with hot weather all around the
year where in the UK this product has not been successful at all therefor it is not available on the market.
Demographic- all the products that Nestle produces for different type of generations from new born babies to
children and to adults. For example, all their baby formulas are especially created for babies, their chocolates,
snacks, different type of cereal, ice creams and ready breakfast meals are mainly for the children. Coffees,
Protein bars and drinks are produced mainly for older generation. Nestle.com. (2018). [online] Available at:
https://www.nestle.com/csv/impact [Accessed 16 Dec. 2018].
Targeting
Nestle marketing is mainly mass marketing undifferentiated with 2000 brands they expand all around the
world and develop products for every age, family and gender.
Positioning
By creating high quality products, special services, easily accessible and efficient channels, Nestle makes their
products more attractive to their customers more effectively & efficiently in comparing with other
competitors in the highly competitive market by occupying a clear, distinctive and desirable place on each
supermarket, pharmacies and local stores depends on the differentiation. Nestle.com. (2018). [online]
Available at: https://www.nestle.com/csv/impact [Accessed 16 Dec. 2018].
Differentiation
Channel differentiation - Nestle deliver their products to the customers through their professional and skilled
sales teams, transportation and distribution this way it makes it easy for the product to reach their customer
easy.
People differentiation-The company has many employees around the world they are committed to provide
good working conditions with flexible hours and great employment possibilities that support a better private
and professional life.
Service differentiation - Another advantage for the company is the 24/7 customer service they provide for its
respective competitors. High quality review is provided for its customers. The Customer service department
are constantly finding out customer’s new needs and answers toward their products.
Product differentiation – With more than 2000 brand Nestle has confidents that with their unique, taste and
healthy choices of products their company will continue to grow and develop to provide even better nutrition
for generations to come.
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Image Differentiation – Their logo and packaging are very well known to the consumers as the
biggest food and beverage company in the world Nestle image has been the leading brand for
over 150 Years.
Conclusions
As per the marketing research from the primary and secondary data we have established that Nestle can
pursue a growth strategy through investing in clear and better labelling on their baby food products.
Developing different taste and packaging with exceptional design that attracts the consumers with additional
marketing futures sand products.
The market research and the business plan aim to give a guideline to Nestle of which direction they will
choose to take. It will encourage them to achieve many of their business plans and most important their
Mission and Vison.
Recommendation
Our recommendation to Nestle is to invest in better labelling and packaging, advertising their new products
and promoting new ideas for differentiation on the competitive market. Since their first product on the
market was baby formula milk created by Henry Nestle in 1867, they must continue to concentrate and invest
more in this special product for the most important consumers of all our children!
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Referencing:
Bhasin, H. (2018). Marketing Strategy of Nestle - Nestle Marketing Strategy. [online]
Marketing91. Available at: https://www.marketing91.com/marketing-strategy-nestle/ [Accessed 16 Dec.
2018].
Bhasin, H. (2018). Bcg matrix or BCG analysis - Boston Consulting group matrix & Strategies. [online]
Marketing91. Available at: https://www.marketing91.com/bcg-matrix/ [Accessed 16 Dec. 2018].
Bhasin, H. (2018). Marketing Mix of Nestle - 4 Ps of Nestle - Nestle Product marketing mix. [online]
Marketing91. Available at: https://www.marketing91.com/marketing-mix-nestle/ [Accessed 16 Dec. 2018].
Nestle.com. (2018). [online] Available at: https://www.nestle.com/csv/impact [Accessed 16 Dec. 2018].
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