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CBEB1106 – Principles of Marketing

Marketing Project Paper :

Marketing in Multinational Company - Nestle

GROUP MEMBERS :

SYAZWANI JANNAH BINTI MD ISMAIL CEA120100

TAN WEI EN CEA120104

RAUDZOTUL JANNAH BINTI AMIN CEA120091

Prepared for : Mr Syamsul Izwan Bin Saharani

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Table of content

Introduction 2

Background history of the company 3

Organization structure 4

Vision, mission and objectives 6

Customer-Driven Marketing Strategy 7

Marketing mix : product 10

Price 17

Promotion 18

Place 22

Conclusion

References

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Introduction

In this research work the company chosen by us are Nestle Malaysia. I have tried to cover

the brief history of the company, vision, mission and objectives of the company. This brief

history and other sub heading under company background is compulsory to be understood and

researched well as they form the basis for marketing plan of the company. At the end we have

proceeded to the 4Ps of the marketing for Nestle.

Nestlé was founded in 1867 by pharmacist Henri Nestlé on the shores of Lake Geneva in

Vevey, Switzerland. One hundred and thirty-four years later, our headquarters are still in Vevey,

surrounded by the Swiss Alps in one of the world‟s best-preserved environmental settings. As

they have grown from humble beginnings into the world‟s largest food company, they have

attempted to take the fundamental cultural values of environmental preservation and cleanliness

into every country where they operate. Company has 468 Nestlé factories currently in operation.

Company‟s facilities reflect the environmental values basic to Nestle Company.Top management

follow the Company‟s environmental performance.Company‟s Environmental Officer reports

directly to General Management to ensure there is on-going awareness regarding environmental

affairs.

Nestlé Environmental Advisory Group meets regularly to review current environmental

issues and to anticipate potential concerns. This allows them to maximize control over their

activities and contribute to sustainable development in the countries where they operate. The

Nestlé Environment – Progress Report 2000 describes the results of continuous improvement in

its environmental practices and being a leader in environmental performance

History

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Nestlé is a historical multinational company with 140 plus history. Early in the 1860s

Henri Nestlé, a pharmacist, developed a food for babies who were unable to breastfeed. His first

success was a premature infant who could not tolerate his mother's milk or any of the usual

substitutes. People quickly recognized the value of the new product, after Nestlé's new formula

saved the child's life, and soon, Farine Lactée Henri Nestlé was being sold in much of Europe.

In 1905 Nestlé merged with the Anglo-Swiss Condensed Milk Company. By the early

1900s, the company was operating factories in the United States, Britain, Germany and Spain.

World War I created new demand for dairy products in the form of government contracts. By the

end of the war, Nestlé's production had more than doubled.

From 1918 to 1938, after the war Government contracts dried up and consumers switched

back to fresh milk. However, Nestlé's management responded quickly, streamlining operations

and reducing debt. The 1920s saw Nestlé's first expansion into new products, with chocolate the

Company's second most important activity.

Nestlé felt the effects of World War II immediately. Profits dropped from $20 million in

1938 to $6 million in 1939. Factories were established in developing countries, particularly Latin

America. Ironically, the war helped with the introduction of the Company's newest product,

Nescafé, which was a staple drink of the US military. Nestlé's production and sales rose in the

war time economy.

The end of World War II was the beginning of a dynamic phase for Nestlé. Growth

accelerated and companies were acquired. In 1947 came the merger with Maggi seasonings and

soups. Crosse & Blackwell followed in 1960, as did Findus (1963), Libby's (1971) and Stouffer's

(1973). Diversification came with a shareholding in L'Oréal in 1974.

Nestlé's growth in the developing world partially offset a slowdown in the Company's

traditional markets. Nestlé made its second venture outside the food industry by acquiring Alcon

Laboratories Inc.

Nestlé divested a number of businesses1980 / 1984. In 1984, Nestlé's improved bottom

line allowed the Company to launch a new round of acquisitions, the most important being

American food giant Carnation.

The first half of the 1990s proved to be favorable for Nestlé: trade barriers crumbled and

world markets developed into more or less integrated trading areas. Since 1996, there have been

acquisitions including San Pellegrino (1997), Spillers Petfoods (1998) and Ralston Purina

(2002). There were two major acquisitions in North America, both in 2002: in July, Nestlé

merged its U.S. ice cream business into Dreyer's, and in August, a USD 2.6bn acquisition was

announced of Chef America, Inc.

Board of directors

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Tan Sri Dato' Seri Syed Zainol Anwar Ibni Syed Putra

JamalullailIndependent, Non-Executive ,DirectorChairman of the

Board of DirectorsChairman of the Audit Committee

Chairman of the Nomination Committee

Tan Sri Datuk (Dr.) Rafiah SalimIndependent, Non-Executive

DirectorMember of the Audit Committee

Member of the Compensation Committee

Dato' Mohd. Rafik bin Shah MohamadIndependent, Non-Executive

DirectorMember of the Audit Committee

Chairman of the Compensation Committee

Dato' Frits van Dijk Non-Independent, Non-Executive Director

Member of the Nomination Committee

Member of the Compensation Committee

Tan Sri Datuk Yong Poh Kon

Independent, Non-Executive Director

Member of the Audit Committee

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Peter Vogt

Managing Director

Alternate Director to Marc Seiler

Marc Seiler

Independent, Non-Executive Director

Alternate Director to Peter Vogt

Adnan Pawanteh

Alternate Director to Dato' Frits van Dijk

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VISION

Nestlé aim is to meet the various needs of the consumer every day by marketing and selling

food of a consistently high quality.

The confidences that consumers have in our brands is a result of our company’s many years

of knowledge in marketing, research and development, as well as continuity - consumers

relate to this and feel they can trust our products.

MISSION

Nestlé’s brands and products are the focus of continual innovation and renovation so that

they meet and exceed our consumers' expectations. We seek to ensure that our products are

available whenever, wherever and however our consumers want them.

OBJECTIVES

Nestlé’s 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

today’s and tomorrow’s consumers, Nestlé 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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Customer-Driven Marketing Strategy

Market Segmentation

Markets consist of buyers, and buyers differ in one or more ways. They may differ in

their wants, resources, locations, buying attitudes, and buying practices. Through market

segmentation, companies divide large, heterogeneous markets into smaller segments that can be

reached more efficiently and effectively with products and services that match their unique

needs. In this section, there are 3 important types of segmentation that are segmenting consumer

markets, segmenting business markets and requirements for effective segmentation.

1. Segmentation Consumer Markets

Demographic segmentation divides the market into groups based on demographic

variables such as age, sex, family size, family life cycle, income, occupation, education, religion,

race and nationality.

In this project, we noticed that Nestlé uses the age and life–cycle stage segmentation to

divide the market into groups. Age and life-cycle stage mean that consumer needs and wants are

changing with their age as well. Nestlé offers different products or use different marketing

approaches for different age and life-cycle groups. For example, Nestlé‟s products divide into

children cereal, adult cereal and family cereal.

Psychographic segmentation divides buyer into different groups based on lifestyle

characteristics. People in the same demographic group can have very different psychographic

make ups comprising their activities, interests and opinions (AIOs). For example, a bowl of

FITNESSE cereals every morning can help to achieve the body shape that you want. The

crunchier FITNESSE flakes that made of whole-wheat are high in essential nutrients like

calcium, folic acid and the most important is low in fat. Being typically low in fat and high in

complex carbohydrates, protein and fiber, whole-wheat can help you to feel full longer and

reduce snacking which will help you to maintain your desired weight. Now, there have more and

more flavors. The cereals can mixed with a succulent blend of sun- ripened fruits- a harvest of

crisp apples, tangy cranberries and golden pineapples, topped off with sun-ripened sultanas,

raisins, papayas and tender toasted coconut. For someone who cares about healthy and beauty

will buy FITNESSE or FITNESSE & FRUITS.

2. Segmenting Business Markets

Consumer and business marketers use many of the same variables to segment their

markets. Business buyers can be segmented geographically, demographically or by benefit

sought, user status, usage rate, and loyalty status. Yet, business marketers also use some

additional variables, such as customer operating characteristics, purchasing approaches,

situational factors and personal characteristics. By going after segments instead of the whole

market, companies can deliver just the right value proposition to each segment served and able to

receive maximum rewards for close attention to consumer needs.

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3. Requirement For Effective Segmentation

Obviously, there are many ways to segment a market, but not all segmentations are

effective. To be useful, market segments must be

Measurable : The size, purchasing power, profiles of the segments can be measured.

Accessible : The market segments can be effectively reached and served

Substantial : The market segments are large or profitable enough to serve.

Differentiable : The segments are conceptually distinguishable & respond differently to different

marketing mix elements & programs.

Actionable : Effective programs can be designed for attracting & serving the segments.

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Market Targeting

Market segmentation reveals the firm‟s market segment opportunities. The firm now has

to evaluate the various segments and decide how many and which ones to target.

Evaluating market segments

In evaluating different market segments, a firm must look at 3 factors that are segment size and

growth, segment structural attractiveness and company objectives and resources.

Selecting Target market segments

After evaluating different segments, the company must now decide which and how many

segments it will target. A target market consists of a set of buyers who share the common needs

or characteristics that the company decides to serve.

Positioning

Beyond deciding which segments of the market will be targeted, the company must

decide what positions it wants to occupy in those segments. Products position is the way the

product is defined by consumers on important attributes-the place the product occupies in

consumers‟ minds relative to competing products. Positioning involves implanting the brand‟s

unique benefits and differentiation in the customer‟s minds. A product‟s position is the complex

set of perceptions, impressions, and feelings that consumers have for the product compared with

competing products.

1. Choosing a Positioning Strategy

Some firms find it easy to choose their positioning strategy. The positioning task consists

of three steps .There are identifying possible competitive advantages, choosing the right

competitive advantage, selecting an overall positioning strategy and developing a positioning

statement.

2. Communicating and Delivering the Chosen Position

The company must take strong steps to deliver and communicate the desired position to

target consumers once it has chosen a position. All the company‟s marketing mix efforts must

support the positioning strategy. Positioning the company calls for concrete action, not just talk.

If the company decides to build a position on better quality and service, it must first deliver that

position.

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Products

A product can be defined as anything that can be offered to a market for attention,

acquisition, use or consumption that might satisfy a want or need. Product in marketing mix is

including the decisions of branding, packaging and labeling.

Branding

A brand is a name, sign, symbol, term or design, or a combination of these, that identities

the maker or seller of a product or service. As the country‟s foremost food company, Nestlé has

use the brand of Nestlé to help consumers identify their products. Nestlé market leading brands

include Milo, Nescafe, Maggi and Nestle Bliss. It takes great pride in playing a part in the

everyday lives of Malaysians - young and old alike, at work or at play.

Junior Foods

NESTLÉ Junior Foods provides precise nutritional balance for your

baby.

Milk

NESTLÉ milk has been propelling kids and adults forward since the

1950s.

Cereals

Start your day right with a nutritious NESTLÉ Breakfast Cereal and keep

hunger at bay with a NESVITA Cereal Bar.

Beverages

From morning to end of day, NESTLÉ beverages have always played an

important part in the day of most Malaysians.

Creamers

For better tasting of your cooking to creaming your beverage, NESTLÉ

has the best range for you.

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Prepared Foods

Meal preparation is easy with the MAGGI range of products with fresh

ingredients to suit your busy lifestyle

Chilled Dairy

NESTLÉ Yogurt range is loaded with real yummy goodness!

Ice Cream

Enjoy your favorite NESTLÉ Ice Cream today!

Confectionery & Chocolates

“Have a break, have a KIT KAT!”

Water

PERRIER is a delicious, non-alcoholic alternative for health conscious

consumers.

Performance Nutrition

POWERBAR helps you optimum performance whether you are at the

gym or running for the Olympics.

Health Science

Complete and balanced nutritious beverage for long term

nourishment. With a special fiber blend, it helps your gut feel good.

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Packaging

Packaging is defined as physical container in which a product is sold, advertised or

protected. A package serves three major objectives. Nestlé is effective in packaging in order to

deliver the safest food to their customers. Nestlé has adopted an integrated approach to

packaging in its continuous improvement policy. This involves what we call a „4R‟ approach.

Reducing the weight and volume of packaging materials. Leading in the development and use of

packaging materials made from sustainably managed Renewable resources. Aligning with and

supporting initiatives to Recycle or recover energy from used packaging, and helping to inform

consumers through the use of identification and recycling symbols, and by encouraging

consumers to recycle where programs are available. Using Recycled materials wherever it makes

sense. For example, Nestlé‟s new NaturNes baby food pot shows that it requires less energy and

produces fewer CO2 emissions than the previous version – over its life cycle from farm to spoon

and including recovery of packaging. This result from the weight reduction achieved by

replacing a glass jar with a plastic pot, as well as energy savings from the new manufacturing

process and the energy recovered from used plastic pots. It has been substantiated by a Life

Cycle.

Labelling

Labels are once a separate element that was applied to a package. Today, they are an

integral part of a typical package. Labels perform both promotional and informational functions.

A label carries an item‟s brand name or symbol, the name and address of the manufacturer or

distributors, information about the product‟s composition and size, and recommended uses. The

right label can play an important role in attracting consumer attention and encouraging

purchases. Nestlé is very conscious of its role in communicating responsibly to consumers so it is

committed to clear, user-friendly labelling and supporting materials to help consumers make well

informed food choices. Nestlé has already introduced the Nestlé Nutritional Compass (launched

in 2005). This is an on-pack information panel that provides consumers with relevant, easy-to-

understand nutrition information. It is a global labelling scheme that translates into billions of

clearer nutrition labels in the hands of consumers.

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PRODUCT MIX WIDTH

PR

OD

UC

T

LIN

E

LE

NG

TH

Milk Cereals Creamers Beverages Prepared

Foods

Chilled

Dairy

Ice

Cream

Confectionery

and

Chocolates

Healthcare

Nutrition

Junior

foods

Performances

Nutrition

NESLAC Fitnesse Tea Pot Milo Buitoni Yogurt

Drink

Drumstick KIT KAT NUTREN Baby

Cereals

POWERBAR

NESPRAY Banana

Nut

Clusters

Ideal Nestomalt Maggi

Sauces

Yogurt Trophy SMARTIES PEPTAMEN Rice

Porridge

Everyday Almond

Clusters

Carnation Nescafe Meal

Solutions

Mat Kool MILKYBAR Rusk

Omega Plus

Acticol

Corn

Flakes

Nestle Tea

Time

Nestea Maggi Apple

Sourz

Nesvita Hical

Non Fat

Nestum Coffeemate Nesvita

Soya Bean

Milk

Blue Tubs

Koko

Crunch

Nestle low

fat milk

La

Cremeria

Honey

Star

Omega

UHT Milk

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PRODUCT LINE LENGTH

DEP

TH

LIN

E

PRO

DUC

T

MILO NESCAFÉ Yogurt MAGGI

Sauces

MAGGI POWERBAR NUTREN

MILO

Fuze

Cereals

NESCAFÉ

2-in-1

NESVITA

Yogurt

Fruit Bowl

Chili

sauce

Perisa

Asli

POWERBAR

Performance

NUTREN

Optimum

MILO

Fuze

3in1

NESCAFÉ

Light Roast

NESVITA

Yogurt

Apple &

Aloe Vera

Extra

Hot

Curry

Flavor

POWERBAR

Gel

NUTREN

Fibre

MILO

Fuze

Light

NESCAFÉ

Body

Partner

NESVITA

Yogurt

Hawaii

Melba

Chili

Garlic

Chicken

Flavor

POWERBAR

ProteinPlus

NUTREN

Junior

MILO

Fuze

Mocha

NESCAFÉ

Classic

NESVITA

Yogurt

Strawberry

& Pear

Thai

Chili

Sauce

Tomyam

Flavor

POWERBAR

Beverage

System

NUTREN

Balance

cereal bar

NESCAFÉ

3-in-1

Tomato

Ketchup

Asam

Laksa

Flavor

NESCAFÉ

Premium

Range

MAGGI

soya

sauce

NESCAFÉ

Cappuccino

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New Products

NINHO Fruti

Ninho Fruti is made with real fruit and provides 32%, 31% and 40% of

children’s recommended daily intakes of vitamins A, C and vitamin D

respectively. It also provides 30% of the recommended daily intake of

iron. Ninho Baixa Lactose is a fortified low lactose drink suitable for the

10% of children who are lactose intolerant.

NESTLÉ OMEGA PLUS ONE

Taking care of your heart's wellness is simplified with new NESTLÉ OMEGA PLUS ONE. This is because one cup a day for 30 days is all it takes to lower your cholesterol by up to 7%*. Try it today for a healthier heart.

RRP (WM): RM 14.00

NESTLÉ NESTUM 3in1

NESTLÉ NESTUM 3in1 and herbal specialists Eu Yan Sang has partnered to reveal a new innovation in cereal drinks. Infused with the finely selected Chinese herbs to keep you healthy and active, it is available in American Ginseng and Dang Gui, offering you a uniquely pleasing flavour. With the goodness of whole grains to give you balance in your morning.

RRP (WM): RM 9.50

MAGGI 2-Minute Noodles Unveils New Packaging!

MAGGI carries the new 'Protein dari Gandum' seal as each pack MAGGI 2-Minute Noodles serves as source of protein from wheat. So hurry, head on to your favourite store, grab it and satisfy your noodle cravings!

Curry & Chicken:

RRP (WM & EM): RM4.50

Tom Yam & Asam Laksa:

RRP (WM & EM): RM4.95

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MILO Fuze Light & MILO Fuze Mocha

MILO Fuze Light:

40% less fat, 25% less sweet. MILO Fuze Light is the easy tasty

way to enjoy MILO with natural goodness, ACTIGEN-E and

PROTOMALT. Just add hot water for a lighter cuppa that's truly

nutritious.

RRP: RM10.60 / pouch (15 sachets)

MILO Fuze 3in1 MOCHA:

MILO Fuze 3in1 MOCHA is the easy, tasty way to get a cup of

MILO plus coffee- for a great tasting, nutritious drink and full of

goodness. Just add hot water for a quick, pleasurable treat

whenever you need a break in your action-packed day!

RRP: RM10.60 / pouch (15 sticks)

FITNESSE & FRUIT

Have a bowl of FITNESSE cereals every morning. Not everyone

knows this, but it can help you achieve the body that you want.

Made from whole-wheat, the now crunchier FITNESSE flakes are

high in essential nutrients like calcium and folic acid and low,

low, low in fat.

Now it mixed with a succulent blend of sun-ripened fruits - a

harvest of crisp apples, tangy cranberries and golden pineapples,

topped off with sun-ripened sultanas, raisins, papayas and

tender toasted coconut.

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* RRP - Recommended Retail Price.

Price

Price is the amount of money that customers have to pay to obtain the product and

services. Price is the sum of all the values that consumers give up in order to gain the

benefits of having or using the product or services. Nestlé has produced many types of

product therefore there will have different types of pricing according to each type of

product.

Pricing Strategy

Pricing strategy is the specific strategies that firms use to price goods and services

grow out of the marketing strategies they formulate to accomplish overall organizational

objectives. In general, firms can choose from two broad pricing strategies that are market-

skimming pricing and market-penetration pricing. Market-penetration pricing is that the

companies set a low initial price to penetrate the market quickly and deeply to attract a large

number of buyers and win a large market share. For Nestlé, it uses the strategy of market-

penetration pricing to introduce in the target market. Nestlé has developed a specific

business model called “Popularly Positioned Products” (PPPs) which focuses on the

specific needs of around 3 billion lower-income consumers worldwide. PPPs offer these

consumers the opportunity to consume high-quality food products that provide nutritional

value at an affordable cost and appropriate format.

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Promotion

Marketing Management Orientation— The Marketing Concept

First of all, Nestlé has positioned itself to hold marketing concept as its core concept

while doing marketing activities. Marketing concept is a marketing management philosophy

that holds that achieving organizational goals depends on knowing the needs and wants of

target markets and delivering the desired satisfactions better than competitors do.

Differ from selling concept, marketing concept emphasizes on focuses on customer

needs, and integrates all marketing activities that affect customers. Nestlé has chosen to

gain and hold its‟ profits by creating lasting relationships with the right customer based on

customer value and satisfaction.

Due to Nestlé products are common commodity foods and drinks products, therefore

the competition in this industry is intense. This also imply that its‟ products can be replaced

easily. Therefore, to be conspicuous among these competitors, Nestlé has chosen to hold

marketing concept. It targets on certain market segments based on its‟ various products and

delivers desired values to those target consumers.

For instance, for its beverage products, it divides and classifies market according to

the consumers‟ age, sex and living style. Milo is drink mostly targeted on younger

consumers such as kids. Other than being healthy breakfast and provides energy through out

the day, Nestlé delivers this products‟ value more than that: “You can become a champion

by drinking Milo!” For Milo‟s commercial advertising on electronic media especially on

television, it reminds consumers repeatedly that “champions drink Milo”. Nestlé hires

young and successful athletes to become the actors in Milo‟s commercial advertisements,

and delivers messages desired by most kids such as “We are not kids!” or “We are

champion!”.

Another good example from Nestlé beverage product would be Nescafé. Opposite to

Milo, Nescafé targets on adult consumers that need to stay alert most of the time in order to

complete their studies or works. Anyway, there are other products in the market that provide

similar value of being able to keep people alert. Thus, to stand out from these competitors,

Nestlé positions Nescafé to be a product that becomes “a good start of a day”. As a result,

we can see Nescafé‟s commercial advertisement actors acting happily and satisfied once

they have drunk Nescafé.

These examples have shown that Nestlé realizes that it has to be outstanding, special

and irreplaceable in turn to gain large market share in this industry. To accomplish this goal,

it studies all potential consumers‟ needs and wants, then try to deliver desired values to

these consumers. Hence, Nestlé various products deliver different values to the market,

such as Milo provides desire to become champion and energetic to kids, Nescafé delivers

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needs to stay alert and happy to adults, while Omega Plus Acticol and Nestiva state to

provide healthy lifestyle to their consumers, etc.

In a nutshell, Nestlé holds marketing concept as its‟ guide when doing its‟ marketing

activities by delivering needs and wants desired by consumers better than the competitors

do and this is one of the main reasons why it is able to stand out and differ itself among all

the competitors in this industry.

Advertising

There are four steps in developing an advertising program, which are setting

advertising objectives, setting the advertising budget, developing advertising strategy, and

evaluating advertising campaigns.

1. Setting Advertising Objectives

Advertising objective is a specific communication task to be accomplished with a

specific target audience during a specific period of time. Advertising objectives are divided

into three main purposes which are to inform, persuade, or remind.

Due to Nestlé has many different products, therefore it can use different advertising

objectives for different products. Basically, Nestlé use reminder advertising for most of its

mature products, so that it can keep consumers thinking about the products. Many of the

Nestlé products have reached mature that most of the consumers know their existence, such

as their beverage products(Milo, Nescafé), children cereals(Koko Krunch, Honey Stars),

growing up milk(Nespray), confectionery and chocolates(Kit Kat, Smarties), prepared

foods(Maggi noodles, Maggi sauces), and so on. Thus, all Nestlé has to do is to keep

reminding consumers about their superior values by continuing advertise these products.

Nevertheless, Nestlé also launches new products at the same time. For those new

products, Nestlé has to use informative advertising, which is to introduce new product

to the market. Examples of current new products would be Ninho Fruti, Nestlé

Nestum 3 in 1, Nestlé Omega plus One, Maggi Noodles Kari Letup, Nescafé Body

Partner (Breakfast, Ginger and Honey, Ginseng, Hi-Calcium Milk) and so on.

2. Setting the Advertising Budget

By reason of most of Nestlé products have many competitors in the market, hence it

needs to advertise more heavily to be noticed above the noise in the market.

3. Developing Advertising Strategy

Creating the Advertising Message

A company has to create a message strategy before it plans what the advertisement‟s

content should be. A message strategy is general message that will be communicated to

consumers. For Nestlé in Malaysia, the message would be “The nutrition that Nestlé

delivers to all its consumers is embodied in promise of „Good Food, Good Life‟…a promise

of healthier food choices.” It is clear and obvious that Nestlé is trying to display an image

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which its products are positive and healthy element in consumers‟ life and this message is

supported by Nestlé current and newly released products that declare themselves to be

“maintain desired weight, high in essential nutrients, help to achieve the body that you

want…” Some of the examples would be Nestlé Fitnesse & Fruit, Nescafé Body Partner,

Nestlé Omega Plus Acticol and so forth.

Since now Nestlé has the big idea about what to deliver to its target consumers as a

whole, it now has to turn idea into an actual advertisement execution to capture the target

market‟s attention and interest. There are several types of execution styles to present

messages and among the execution styles that Nestlé uses to deliver its messages are slices

of life, lifestyle, mood or image, musical.

There is commercial advertisement where the actors of the ad wake up and drink a

cup of Nestlé beverage products while exhibit satisfied and pleased expression once they

have consumed those products, indicates indirectly that drinking Nestlé products would be a

nice start of a day. This is one of the examples of “slice of life” execution style used by

Nestlé.

At the same time, Nestlé also applies “lifestyle” execution style in its

advertisements. For instance, an advertisement of Milo, one of its beverage products shows

a primary school student drinks a cup of Milo early in the morning and after school, while

there is a green bar below the screen that illustrates the kid‟s energy level will boost up

every time after he drinks Milo. This advertisement is attempting to convince the target

consumers that how the product (Milo) fits in with a particular lifestyle (student lifestyle in

this case).

Besides, some of the Nestlé products have used “mood or image” execution style

while delivering the messages of its product‟s superior values to targeted market. An

excellent example will be its chocolate and confectionary products, Kit Kat in particular.

Kit Kat‟s commercial advertisement keeps remind consumers to consume Kit Kat when

they want to take a break. There is an ad where two men are competing in a mamak store to

find out who has stronger muscle, half way through that competition, they have a break and

eat a Kit Kat. Right after they have eaten the Kit Kat, they continue the competition.

Meanwhile, the screen comes out with words suggest that “have a Kit Kat, take a break”. In

this case, Kit Kat attempts to create a relax mood and gives a hint to consumers to eat Kit

Kat when they are having a break.

We can spot the “musical” execution style in Nescafé‟s advertisement, where as the

background music keeps on playing a line:”One now one Nescafé, One now one

Nescafé…” with light and easy-to-remember music. This advertisement is repeated times

and times to “insert” that song into consumers‟ mind with the intention to formulate the

consumers‟ mindset to “have a Nescafé immediately”.

Selecting Advertising Media

Mostly Nestlé has chosen television and newspapers as its medium to advertise its

products. This is caused by its target market is large and television has good mass-market

coverage with sound, motion and appealing to the senses that support Nestlé‟s execution

styles to present its messages. On the other hand, newspaper is flexible, has good local

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market coverage, broad acceptability and high believability.

Regarding to the media timing, by reason of Nestlé products are common necessities

that are consumed through out the year, therefore Nestlé advertises its products constantly

along the year.

In brief, Nestlé has examined carefully who will be its target markets, what

messages it would like to deliver to them, how and when to deliver the messages to them.

Then, it comes out with advertising plans that are able to accomplish its advertising

objectives.

Sales Promotion

Sales promotion refers to short-term incentives to encourage the purchase or sale of

a product or service. Among the sales promotion tools that Nestlé uses are samples, price

packs, premium, contests, sweepstakes, and so forth.

Nestlé is regularly serving samples of its products in hypermarkets in order to allow

consumers to have a taste of its new products while reminds consumers about its products.

In the meantime, it offers price packs that enable consumers to save off the regular price of

a product. For instance, in Malaysia, Nestlé promotes the product of Maggi & Tebus by

buying RM5 worth of Maggi cooking products can redeem 1 coupon to exchange for

MAGGI premium items. The redemption period is from 3rd November 2012 to

30th December 2012. Previously, Nestlé Fitnesse also offers price pack of “Save RM1.00

with every purchase of Nestlé Fitnesse 180g and NESTLÉ Fitnesse & Fruit 240g” from 1st

March 2007 until 31st March 2007.

Last but not least, Nestlé organizes contests and sweepstakes to attract people to

purchase its products as well. For example, a person who consumes particular Nestlé ice

cream such as Nestlé Drumstick Spiro stands a chance to win prizes by filling forms.

In summary, Nestlé is putting a lot of effort in sales promotion in order to boost up

its sales as well.

2

3

Place

Company can design their distribution channels to make products and services

available to customers in different ways. Each layer of marketing intermediaries that

performs some work in bringing the product and its ownership closer to the final buyer is a

channel level. Because the producer and the final consumer both perform some work, they

are part of every channel.

The number of intermediary levels indicates the length of a channel. There are two

types of channels that are direct marketing channel and indirect marketing channel. Direct

marketing channel has no intermediary levels so the company sells directly to consumers.

While indirect marketing channel has containing one or more intermediaries.

Nestlé Company is currently the largest food company in the world. The

distributions of Nestle product to end consumers are as below:

1) 4 stage of distribution is used when Nestlé has production plant and distribution

channel within that particular country. Example country is Switzerland country.

Where Nestlé produces the good and distribute to the wholesaler and retailer, which

end result to the end consumers.

Producer

Wholesaler

Retailer

End Consumer

2

4

2) 5 stage of distribution is used when Nestlé doesn‟t have a distribution channel in

that particular due to cost of transportation and exacta. Example like in Malaysia

country 5 stage of distribution is used, Nestlé Malaysia has give the right of

distribution Nestlé product to Thong Guan agencies of distribution, where Thong

Guan agencies will sell the Nestle product to the wholesaler or retailer like Macro,

Giant, and Carrefour supermarket. Then the wholesaler or retailer will sell to the end

consumer.

Producer

Agent

Wholesaler

Retailer

End Consumer

2

5

3) 6 stage of distribution is used by Nestlé to export their goods to another country.

Where Nestlé required the shipper to ship their good to the country that demanded

those goods and the agent in charge of the distribution of the good will pick the good

from port and distribute to the wholesaler and retailer that at last reached to the end

consumers.

Retail Primary placement for Nestlé products is still centered on grocery stores,

although the increase in the number of convenience foods it produces has meant that

more impulse locations are being sought, such as vending machines and petrol

station.

In Europe and the USA, grocery shopping is usually concentrated around large retail

outlets such as Wal-Mart, Asda and Tesco but in countries such as India grocery

shopping is still concentrated around small local stores and markets. This has

presented Nestlé marketing team with problems when trying to standardize

promotional ideas for use in retail outlets.

Producer

Agent

Wholesaler

Retailer

Shipper

End Consumer

2

6

References

1. http://www.nestle.com.my/Pages/Nestle.aspx

2. http://en.wikipedia.org/wiki/Nestl%C3%A9