Nestle Is The Worlds Largest Food Processing Company Marketing Essay

COMPANY PROFILENestl 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.

OBJECTIVESNestls 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.

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

Milk products and nutrition (45%)

Prepared Dishes and Cooking Aids (29%)

Chocolates and Confectionery (13%)

Beverages (13%)

Market SegmentationFor getting the maximum market share and respect of the product inthe minds of the consumer, as per observation it is been concluded that Nestle segmentation is based on two points.-Geographic Segmentation-Demographic Segmentation

Geographic SegmentationThe 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 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

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.

Internal EnvironmentStrengths :- 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.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.WeaknessesThe 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.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 changesbut 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 entrantsSupply Chain : complex chain management

External EnvironmentOpportunitiesThe 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.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 CompanyThreatsAdjustments 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.-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