Nestle Marketing Case Study Example
Headquartered in Vaud, Nestle is a Swiss international drink and food processing conglomerate that deals with pet foods and confection. This brand also deals with packaged food, breakfast cereals, frozen food, dairy products, bottled water, tea, and coffee.
Nestle works with brands like Nescafe, Nesquik, Smarties, Maggi, Vittel, KitKat, and Nespresso. Each makes a sale of more than a billion franc per year. It was formed as a result of the merger with an Anglo-Swiss diary-based company.
The brand has acquired brands like Findus, Libby’s, Crosse & Blackwell, Rowntree Mackintosh, and Gerber. It operates across 86 countries and employs more than 328,000 people. Nestle is also one of the main shareholders of Loreal.
In 2011 Nestle topped the list of Fortune 500 companies as it had a market share of $200, and had a secondary listing on Euronext. As a health and nutrition enterprise, Nestle aims to improve the quality of lifestyle, helping the community where it operates to meet the preliminary and ultimate needs.
Good food, good life -company aims to provide customers with the most nutritious, delicious choice in the form of a versatile range of beverage and food options and eating occasion from breakfast to dinner.
- It implies that the company produces food and beverages. As a wellness enterprise, it needs to do everything that revolves around health.
- It has to do with the taste of the food. As such, the company focuses on making their alluring to the consumers to boost sales and production.
The company aims to present itself as a health and wellness company, delivering improved stakeholder value. It aims to get recognized as a preferred consumer, a preferred retailer selling preferred items.
The vision statement sounds interesting. In the first half, the company talks about its commitment to the stakeholders. In the second half, nestle talks about being a company that’s appreciated by society.
As per the matrix structure, Nestle Inc has a decentralized structure that allows subordinate departments to enjoy high-level independence. Even though vital decisions are taken by the upper-level management, subordinates still have the option to make decisions on all regular operations.
The management system of Nestle gets segmented into three types, upper-level management, middle-level management, and low-level management.
Top-management decides regarding
- Strategic plans and policies for the initiatives
- It appoints middle-level i.e. managers for respective departments.
- It provides guidance and to the subordinate management level.
Branch managers and departmental managers form the mid-level management. They need to keep the top-level managers updated with the progress of their respective departments. They invest more time in the organizational functions.
- They execute plans of the organization in compliance with the directives of top-level management.
- They plan strategies for the sub-units of the department.
- Low-level management is held responsible for the quality, and quantity of work done.
- They interact and guide staff on regular undertakings.
- Nestle has a parallel research and development ability. In 2015, the company invested $1.697 billion in R&D that resulted in 1.89% of the revenue generated.
- Nestle runs its business across 200 countries, reaching customers all over the world.
- It has a huge product portfolio. The company offers 200 alternatives in 7 main categories.
- Uncontrolled water usage in California, which caused drought.
- The company had to recall products due to a sort of contamination.
- The company should clearly label food items indicating all necessary details apart from the nutritional values.
- Nestle can source raw materials from sustainable farms and plantations.
- Nestle can make investments in start-ups. It would help the enterprise meet future challenges and boost sales performance.
- Nestle faces tough competition from large, small, and MNC companies that produce and export quality food items.
- Coffee generates 10% of the company’s total revenue. Henceforth, the profitability of the company depends on the price of coffee beans, which became volatile over the past 6 years.
Nestle’s competitive Advantage
Being present in more than 190 nations, Nestle gets exposed to a cross-culture and anticipates the requisites of the clients. Nestle flaunts a wide product portfolio that helps to increase market share and profitability.
Nestle has an extensive R&D network and works with more than 5000 researchers and scientists all over the world.
With a diverse portfolio of products, Nestle serves customers from different economies and age groups. Being an international producer, it serves the needs of the customer in the best way possible.
Nescafe is one of the most popular brands and belongs to Nestle. It is one of the biggest cash cows of Nestle. Nestle launched Nestea, keeping the perspectives of Indian users in mind. Nestle has Maggi, one of the most profitable brands manufacturing prepared food. Nestle expanded the number of products under Maggi like Maggi Sauce, Maggi pasta, Maggi cubes, etc.
The strength of product pricing comes from its consumption-based packing. Products come in variable assortments and are charged based on the quantity. It includes a 16-pack Maggi, whereas there are single sachets priced at 5 INR each.
For products like Munch, and Kitkat, Nestle follows competitive pricing.
Digital marketing tools and campaign
Nestle makes use of all media to promote its products. Apart from ATL, it also uses BTL media. Packaging and discounts are aimed at providing the customers with the best combination and value to increase sales and improve brand image.
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