Corporate Marketing Strategy revised

Corporate Marketing Strategy6

IntroductionThepaper below documents the marketing strategies that might have beenused by Nestlé’s Nescafé globally into becoming one of the bestcoffee product producers through their classic coffee edition. Apartfrom the marketing strategies that are to be discussed other factorssuch as detailed information about the company’s strengths andweaknesses are discussed through the help of SWOT analysis. Otheranalytical strategies are also used in the paper to help give a verydetailed and informative document about the Nescafé brand. Thevarious sources that have been used to gather the information aresubject to changes that might occur due to different factors one ofthem being that the sources are not guaranteed to give very accuratedata as the real data is.Nescaféis a brand that was created by Nestle in 1938 as an instant coffeemaker that was soluble so that it could help the Brazilian coffeefarmers avoid wastage of their crops. It was introduced officially asone of the product brands by Nestle on 1st April 1938 in Switzerland.The product was soon after exported to Europe where it was introducedas a freeze dried soluble coffee. This was the launch of the GoldBlend (Nestle, n.d). Over the years, Nescafe has introduced someblends that have been developed to capture the natural aroma andflavor of the coffee beans that have been used. Currently, there areover thirty different blends of coffee globally, each of which has anindependent taste from the other (Nescafe, n.d).Nestlé’smission is clear as seen in the mission statement. The main missionof the company is to be able to provide their consumer with the besttastes that they can ever come across. This the company can achievethrough the extensive research that they company does through theirexperience and capability in this field to be in a position to comeup with new and interesting ideas that attract the variety ofconsumers. Accordingto blurtit.com, the Mission of Nestle is: “Nestlé strives to be aleader in nutrition, health, and wellness, with the belief that goodfood is central to health and wellness. At the Nestlé ResearchCenter, nutrition research meets food innovation to bring consumersof all ages and stages of life, foods, and beverages that contributeto health and wellness, while offering remarkable taste andconvenience”(Blurtit, n.d). Nestlé’s vision is to be &quottheleading and the most competitive company that is involved in thenutrition, health, and wellness of the consumers delivering improvedshareholder value to the various preferred corporate citizen,preferred employer, the preferred supplier who sells the preferredproducts (Nestle, n.d).” SituationAnalysis

Eversince the introduction of the instant coffee brand, Nescafe coffeeclassic range by Nestle, there has been a constant rise in the salesof the product. This has been attributed to the continuous increasein the market demand for their product globally as well as improvedquality and diversification of the products that the company is readyto offer to their customers. Many factors have been reviewed and havebeen said to be the leading factor to this trend. Looking at thefinancial results of the sales of the previous three years, thestrategies that had been created by the company for the sales of theproduct can be said to have paid off since the marginal graph asshown below is continuously rising.

Source:http://www.nestle.com/investors/sharesadrsbonds/stockquotes/graphs

Lookingat the graph above, the sales volume is seen to be risingcontinuously even though the trend is not constant. Watching thegraph above, it can be said that after every peak season that thecompany has, the sales drop for a short season then pick up againafter some time within the months to follow. The graph shown aboveshows the sales from the 3/1/2014 to 9/1/2016. Through a study ofthese records, we can get to create a trend that might predict whatmight take place in the next fiscal year of the sale of the Nescaféproducts globally, specifically the coffee classic range. However,the predictive trend might be affected by the marketing strategy thatmight be put in place to keep the number of sales on a constant rise.

FunctionalAnalysis

Nescafehas been known to be a company that is very competitive in thebeverage market with one of the products being the classic coffeeedition. This is due to the type of management that has been put inplace from the top most individual to the individual at the bottom ofthe management chain. Because the company is the parent company ofNestle, decisions that are made by the Nescafé management have to bepassed by the management at the top most before it can be implementedat the respective level. Another reason is that the workers in thecompany are taken through extensive training to improve their skillsin the field. Through time, the individual workers can carry outvarious activities without the need of supervision because they knowwhat is expected of them by the management and also by the endconsumers of the products.

Beingthat Nescafe has started almost seventy years ago, their expertise inthis field has been growing stronger and better as time elapsed (Peneiple, 1987). This experience has been able to contribute totheir continuous success in the sales of their products. Variousproblems and issues that they might have experienced earlier might beavoided in some cases but in some of the cases, it is someunavoidable circumstances that might lead to the problem experiencedat that time. The loyalty of the employees is also to be thanked. Asingle employee could lead to the crumble of the company by tradingthe secrets of the company’s success in the industry to a rivalcompany, but the company can earn the loyalty of its workers andpartners.

PestleAnalysis

Throughoutthe operations of the company since its inception in 1938, thecompany has put itself in the position to set up its branches inlocations that are politically stable. This was a way that would makesure it would have no problem with the country they are in whatsoeverwhenever the location is in its political season. It is very rare toget a single shop in regions that have been under political turmoiljust like it is so for other companies all over the world. Not onlywould Nescafe be saving on its assets due to losses caused bydestruction but it would also be saving the lives of individuals whomight have been posted in those regions while the company would be inoperation.

ForNescafe, it has chosen the idea to set up and introduce the classiccoffee brand in countries that are on the verge of consistenteconomic success and also are economically stable. This aids thecompany when it comes to the sale of this product and also when itneeds to purchase some products in countries where the currenciesvary (Bloom, 2011). The economic stability of a given market is thekey factor to the success of any business. It will make sure that theproducts are in constant supply throughout the year and also thesales will always be promising in such areas.

Socially,Nescafe has created a good image for its products and its consumersand as such, it has been in a position to grow easily in the variouscommunities. Through the various advertising techniques, Nescafe hasbeen able to reach the various types of communities in differentlocations especially the rural areas. Being that the company alsovalues the well-being of their customers, they have created productsthat most people can consume even those who have various healthcomplications. Being that instant coffee is also a current favoriteof people all over the world, Nescafe classic edition has grown to beloved by many because of the various tastes they have to offer totheir customers. It is because their instant coffee has made thelives of numerous individuals easier because they need not grind anycoffee just like before. As in the article by Prospect magazine, itis this that made its mark in Europe by most families (Rushworth, 2012).

Sincethe science of food production has been on the constant evolution asit is for the technology, Nescafe has been in a position to come upwith new ideas that satisfy the needs of the customers. Through theinnovation of the Nespresso machine and dolce-gusto, for example, ithas become easier for individuals to create some flavors by using asingle machine from the comfort of their homes. This has become veryinteresting because the machines have become very popular especiallyin the United States and Europe. (nespresso.com,dolce-gusto.us). Thetechnology has also made it possible for Nescafe also to come up withnew flavors that tend to attract more and more consumers to theirproducts with each passing day. In addition to this, Nescafe has beenable to capture the natural flavors and aromas of each been that theyuse.

Ineach area that Nescafe has been able to set up shop and company, theyhave acted within the legal framework of any foreign company withinthat country. Most companies end up being faced out of businessbecause of neglect of certain laws that they must abide by, beingthat they provide food substances to the citizens. However, being acompany that specializes more on quality than quantity, they havebeen able to meet the standards that have been stipulated for everyfactory that is associated with food production by the ISO standards.As such the company keeps up with the high-quality products that theyhave to offer as per the criteria (Home. n.d.).

Inmost of the area that Nescafe has been able to set up shop, they areusually new markets or sectors that have already been occupied byother players in the beverage industry, but there is still potentialseen. However, most of their ventures are into the untapped marketswhich have helped increase their sales tremendously. Examples of suchmarkets are India and China which are highly populated, and theestimated usage of their products will be very high and encouraging(guruprasad.net, 2014). This is because it has been estimated thatmost of the people who take coffee are between the ages of 35 – 55,of which, are the highest in number in these countries. However, theaverage age of coffee drinkers globally is estimated to be 43 years(sbdcnet.org). Nescafe has a small number of competitors who areready to take the mantle from them. As such, they revolutionize eachand every year so that they can keep up with the competition theyface from these different companies such as P&ampG and Starbucks.

SWOTAnalysis

TheSWOT analysis of Nescafe has been simplified through the matrixbelow.

Strengths

  • Good product distribution and availability

  • Strong brand name under the parent company Nestle

  • Has a number of flavors available in a number of varieties

  • Great advertising

Weaknesses

  • Health concerns of some of the customers making them avoid taking coffee due to caffeine

  • The parent company, Nestle, had a number of recalls of their product in 2008

Opportunities

  • Cheaper prices for products in rural areas

  • Emerging markets

  • Partnership with a number of corporations

Threats

  • Health conscious people are avoiding coffee

  • Competition from other growing companies especially those involved in the production of coffee flavor drinks

Goalsand objectives

Nescafehas shown a fantastic potential for growth. Its products have seenthe growing of interest by its customers globally. This is becausethey have been able to produce products that satisfy the needs of thevarious markets that are available and others that are yet to bediscovered in due time. To achieve this, the company has to come upwith goals that are achievable together with objectives that have tobe completed within a course of time. For this study, the period thatwill be used will be the next three years. Different methods shall bediscussed that will help in the marketing and sale of the classicrange coffee that the company has in store.

Onegoal as per the vision of the company is to be the best and the mostcompetitive company that provides the most nutritious and healthyproducts that their consumers can ever come across as well as mindingthe health and well-being of their consumers. The company wants to dothis through the spread of the classic coffee range globally. Thistype is considered very unique and very accessible due to the way itis packaged such as the sachets.

Thefirst objective that Nescafe will have to reach is to enter the newmarket before other companies do. This will help them get the loyaltyof the individuals before they can be exposed to other products fromthe different companies that pose as competition. To achieve this, ahigh market analysis needs to be done by the corporation to get theperfect market that marches their intended goal and objective. Inthis case, the best markets that can be targeted are China and India.The main reason is that they are countries that have a large growingpopulation. Another reason is that the most important part of thepopulation is made up of the youth who are more of energetic and assuch, the consumption of coffee will be just right for them. Althoughearlier in the document is was stated that the average age of mostcoffee drinkers is averagely the age of 40s, the trend has beenreported to change with time. The attraction of the young, healthyand energetic individuals to the various Nescafé products willbecome the next sub-objective. This task would not be much of achallenge since they were able to pull the same stunt off in Europewhen the household individuals were targeted.

Indiaand China have a healthy population, both physically and financiallymaking any business venture within this region to have higher chancesof success. The brand name of the company comes to aid at this pointbeing that it is still under Nestle. Have this name as the parentcompany people will tend to get attracted to this product. The Properadvertisement will also have to be made because these are twocountries that have a lot of factors that might be confused due totheir different traditions that Nescafe has come across in theprevious years. In India, simple gestures can lead to a lot ofproblems which would not have been the case if it were elsewhere inthe West.

MarketingStrategy

Themain target market for Nescafé is that population that is everdeveloping. Looking at the points stated earlier tow good examples ofthese markets are China and India. These are markets that are alwaysready to welcome any new commodity into their environment especiallythe Nescafé classic coffee edition. Being that these countries arevery industrious, it would be easier for them to save on time becausethis is a product that can be used at any place at any time. Most ofthe individuals in these markets would prefer something that iseasily prepared and has flavor especially with their culturesinvolved with numerous flavors such as the classic edition. It hasalso been noted that in these two countries most of the people areattracted to new commodities and as such they will spend enough moneyto get the items. This, hence, becomes a motivation for the companyto invest in these markets.

Sincethe classic coffee edition is under a well known brand (Nescafe), itwill be easier to for the product to spread through the market. Thepackaging would also be done in a way that it would be able to reachthe cities and also the rural areas. The key will be introduction ofthe sachet in the rural areas which will be relatively cheap and willalso come in different flavors. The logo that will be used is thesame one that is used internationally, coffee in a red mug. Thepricing shall be done by gauging the value of other substituteproducts and then the price shall be got that will be a competitionto the others. The prices shall also be good for those individuals inthe rural so that it shall not be such a challenge.

Theproducts shall be distributed on a regular and in the country throughthe local shops and stalls through which the people get their dailyproducts. The products shall also be distributed through the mallsthat are available for the people to access. Through the variousguarantees that the company shall put up, they shall attract morecustomers to their products. In order to promote the products, thecompany shall have the help of the local citizens, especially theyoung energetic youth to spread the word about the product. Theindividuals can be given personal targets that they should reach bythe end of a period. Advertisement can also be done online becausethese are two countries which are highly connected through theinternet.

Thechart below can be used to assist in the marketing of the productsand it shall be completed as per the titles of the table.

Specific tactical activity

Person/ department responsible

Required budget

Completion date

Product activity

1.

2.

Pricing activities

1.

2.

Distribution chain activities

1.

2.

IMC activities

1.

2.

Inthis table, the activities that are to take place to the end of theprocess are placed together with those who are in charge togetherwith the budgets for each activity.

Thetable below will be used to place the implementation dates of eachprocess through the period of one year. It shall help to strategizeperfectly and each activity shall be filled by the departmentresponsible.

month

Activities week

1

2

3

4

1

2

3

4

1

2

3

4

Product activities

Pricing activities

Distribution activities

IMC activities

TheAnsoff matrix would help gauge what would be the best way to go sinceis also shows some of the risks that the business might face when aparticular activity is conducted at a given moment. The matrix belowwill help understand some of the actions by the company about thegoals and objectives that have been stated above (Delwin, 2014). Sothat the right outcome can be got, the variables have to be relevantto the objectives such as the ones that have been given for thematrix below. For those that have been used, they affect all thedecisions that are to be made by the management regarding what shallbe done in the various areas.

New

Existing

Products

market penetration

Markets

sell more products in existing market

Product development

Increasing risk

Sell new products in existing market

market extension

New

increase sales of current products in the new market

Diversification

Sell new products in new markets

Increasing risk

Lookingat the matrix above, the risks are more, but the results will beworth the risks. For the best results to achieve the results as perthe objectives that were given, it would be best for the company toincrease the sales of the current products in the existing marketsthen once the markets are stable, sell new products in the newmarkets. This is the best strategy that the company can use to getthe sales of their products in this market up and running withouthaving any problems even though they will have to get control overthe risks that they might face because that is what business is.

Currentand Future Segmentation, Targeting &amp Positioning

Themarketing plan will target not only China and India but also otherregions globally. The same strategies will be used to help thecompany grow in the various areas. Currently, Nescafé is Nestlé’slargest brand, and it is number 32 on Forbes most valuable brands(forbes.com). It has been able to stay at the top because is has awell-organized plan for the marketing of their products, and this isstill the main target that the company has for an upcoming year, tobe at the top of their game and also grow larger than it iscurrently.

Tactics

Forthe company to market its products perfectly, a well-definedmarketing mix by the marketing company has to be put in place withthe help of the four P’s: price, product, promotion and place.Since the product at hand is one that is known globally, theintroduction of the product into a new market will not be such a tasksince the product is highly expected in some areas. The need forinstant coffee is high because most people find it hard and expensiveprocessing the grinding processing. An advantage of the instantcoffee is that it can be taken at any moment anywhere compared to theold traditional coffee, which took the time to prepare. And it issuch products that people are after.

Thebest way to carry out the pricing is by neutral pricing. Throughthis, the company will be able to set a price for the products in thenew market that is friendlier for the individuals to buy. The priceswill also have to be that that can challenge any brands that are inthe market that they want to venture in. The prices should be veryattractive to the customers no matter their financial capabilities.To make it possible for their products to penetrate far and widewithin each region, Nescafe introduced the sachet pieces that can besold anywhere and are also very cheap for people to buy. No matterthe place, customers will have access to their best product at thataffordable place.

Timeline and Resources

Forthe best way to carry out the promotions, the company must find a wayin which they might advertise the product to be part of the peopleculture and tradition so that it can be accepted much more easily.For example, the new advert by Nescafé has been able to attract morecustomers just from that short piece. The same can be done in variousareas of the globe. Even though the idea looks costly, but due to thebrand name, the company has the financial resources to back up thisidea. The timeline that has been stipulated for this is a period ofthree years from the current year (2016) until the year 2019. Lookingat the resources at hand the company can use the financial help fromthe parent company, Nestle. Regarding human resources, the companycan use the help of the locals to achieve their given target.

Limitations,Control &amp Conclusion

Theprocess can be met by some limitations some of which includefinancial pressure because the budget might be over the bar dependingon the location. Another limitation is that the company might alsoface competition from substitute products such as tea in variousareas and also competition from other companies that might havealready set up base in the area that they want to take control of.Having done the research as seen above, it is quite clear to say thatNescafé can be successful if the procedures stated above can befollowed. The procedures are, however, subject to change, dependingon the ideologies that other individuals have in making it moresuccessful in the three years to come.

ReferenceList

Albaum,G. (2010). Marketing Mix.&nbspWileyInternational Encyclopedia of Marketing.http://doi.org/10.1002/9781444316568.wiem01040

Arikatt,D. 2012. Retail Planner at Landmark Group Follow. (2012, September).Ansoff matrix. Retrieved September 2, 2016, fromhttp://www.slideshare.net/delwinarikatt/ansoff-matrix-14652645

Bloom,D.E., 2011, January. Population dynamics in India and implicationsfor economic growth. WDA-Forum, University of St. Gallen.

Blurtit,n.d. What Is Nestle`s Vision And Mission Statement? RetrievedSeptember 2, 2016, fromhttp://technology.blurtit.com/800137/what-is-nestles-vision-and-mission-statement

Bradley,F., 2005.&nbspInternationalmarketing strategy.Pearson Education.

DeMooij, M., 2013.&nbspGlobalmarketing and advertising: Understanding cultural paradoxes.Sage Publications.

Forbes.2016. Retrieved September 2, 2016, fromhttp://www.forbes.com/companies/nescafe

Hassan,S.S. and Craft, S., 2012. Examining world market segmentation andbrand positioning strategies.&nbspJournalof Consumer marketing,&nbsp29(5),pp.344-356.

Holmes.H. 2012. Coffee Shop. Retrieved September 2, 2016, fromhttp://www.sbdcnet.org/small-business-research-reports/coffee-shop

Home.n.d. Retrieved September 2, 2016, fromhttp://www.iso.org/iso/home/news_index/iso-in-action/food.htm

Hussain,S., Khattak, J., Rizwan, A. and Latif, M.A., 2013. ANSOFF matrix,environment, and growth-an interactive triangle.&nbspManagementand Administrative Sciences Review,&nbsp2(2),pp.196-206.

Jaffee,D., 2014.&nbspBrewingjustice: Fair trade coffee, sustainability, and survival.Univ of California Press.

McDonald,M., 1996.&nbspMarketingPlanning.John Wiley &amp Sons, Ltd.

Nestle,n.d. Retrieved September 1, 2016, fromhttp://www.nestle.com/brands/allbrands/nescafe

Nescafe,n.d. Retrieved September 1, 2016, fromhttp://www.nescafe.com/our-coffees

Nestle,n.d. Mission &amp Vision. Retrieved September 2, 2016, fromhttp://www.nestle.co.za/aboutus/missionvision

NespressoWorld of Coffee Platform. n.d. Retrieved September 2, 2016, fromhttps://www.nespresso.com/worldofcoffee/wcp/

Peneiple,L. (1987).&nbspNescafé.S.l.

Rushworth,P. 2012. Instant attraction | Prospect Magazine. Retrieved September2, 2016, fromhttp://www.prospectmagazine.co.uk/other/instant-coffee-britain-nescafe

Sheriff,N.M., Ismail, H., Bakar, Z.I.A. and Damain, D., 2016. CoffeeMarketing: What Matters to Coffee Drinkers?.&nbspJurnalIntelek,&nbsp10(2).

SingleServe Coffee Makers | NESCAFÉ® Dolce Gusto®. n.d. RetrievedSeptember 2, 2016, from https://www.dolce-gusto.us/coffee-machines