Chapter 1 Introduction

Nestlé S.A. is the largest nutrition and foods company in the world, founded
and headquartered in Vevey, Switzerland. Nestlé originated in a 1905
merger of the Anglo-Swiss Milk Company, which was established in 1866
by brothers George Page and Charles Page, and the Farine Lactée Henri
Nestlé Company, which was founded in 1866 by Henri Nestlé. The
company grew significantly during the First World War and following the
Second World War, eventually expanding its offerings beyond its early
condensed milk and infant formula products. Today, the company operates
in 86 countries around the world and employs nearly 283,000 individuals.
Nestlé S.A. is the largest food and beverage company in the world. With a
manufacturing facility or office in nearly every country of the world, Nestlé
often is referred to as “the most multinational of the multinationals.” Nestlé
markets approximately 7,500 brands organized into the following
categories: baby foods, breakfast cereals, chocolate and confectionery,
beverages, bottled water, dairy products, ice cream, prepared foods,
foodservice, and pet care.
Nestlé is often referred to as “the most multinational of the multinationals
with a manufacturing facility or office in nearly every country of the world.
Nestlé markets approximately 7,500 brands organized into the following
categories: baby foods, breakfast cereals, chocolate and confectionery,
beverages, bottled water, dairy products, ice cream, prepared foods,
foodservice, and pet care. Nestle is a decentralized organization where
responsibility for operating decisions is delegated to local units, which have
a high degree of autonomy concerning pricing, distribution, marketing, etc.
Nestle is organized into seven different worldwide strategic business units
(SBU’s). These have responsibility for high-level strategic decisions and
engage in overall strategic business development, including acquisitions
and market entry strategy. There is a regional organization that divides the
world into five major geographical zones, such as Europe, North America,
etc. The regional organizations are responsible for developing regional
strategies and assist in the overall strategy development process.
However, neither SBU nor regional manager gets involved in local
operating decisions. Research and Development department is rather
important for the company. Nestle spends around 1 percent of its annual
sales revenue on R&D and has 3,100 employees dedicated to this function.
The R&D function comprises eighteen different groups, which operate in
eleven countries all over the world.
For more than 30 years, consumers have been enjoying the healthy
benefits of BEAR BRAND Filled Milk Powder. But now, Nestle has
introduced a great innovation. Nestle has launched BEAR BRAND
CHOCO.
Moms and kids are the target market for this new product. Aside from its
irresistible chocolatey taste, BEAR BRAND CHOCO has the goodness of
milk. Just like BEAR BRAND Filled Milk Powder, it is fortified with
resistance-building Zinc and Vitamin C. These are essential nutrients that
help fight sickness and fatigue.
Quality is the essential ingredient in all brands and the reason why millions
of people choose Nestlé products every day. Nestles’ consumers have
come to trust in Nestlé’s commitment to excellence and turn to Nestlé
brands to maintain nutritional balance in a fast paced world.
Chapter-2 Research Methodology
Chapter-3 Marketing and Selling Strategies
In today’s very competitive marketplace a strategy that insures a consistent approach
plays an important role. It offers products and services to be competitive. However,
marketing strategy must have a well-defined methodology for the day to day process of
implementing it. It is of little value to have a strategy if there is lack either in resources or
the expertise to implement it. Marketing strategy must address some unique
considerations. However, many are common to all marketing strategies.

Marketing plan of nestle consists of the following framework:

Purpose and Mission

Situational Analysis
Marketing Strategy and Objectives
Additional Consideration
This marketing plan is aimed at highlighting one of the product line extensions of
Nestles’. It mainly focuses on the internal and external environment of Nestle. Apart
from that, this plan includes the marketing strategies, brand promotion strategies,
marketing mix involved and competitive strategies adopted by Nestle. SWOT analysis
one of the major content which is included in this marketing plan. SWOT analysis helps
in finding out the strengths and weaknesses of the organization. Apart from that it helps
the organization to have a deep knowledge about the opportunities and threats which
the organization is likely to face.

Purpose and Mission

The main purpose of this marketing plan is to analyze various aspects of product-line
extension by Nestle. Here the chosen product-line extension is BEAR BRAND CHOCO.
The mission of this plan is to find out whether this product-line extension has met
Nestle-Corporations expectations before launching this product in the market.

Situation Analysis
To bring this product, Nestle has applied a lot of innovation in their existing production
pattern keeping in view the tastes and preferences of target group mainly kids and
moms. Kids mainly prefer tasty food and moms want their kid to be healthy. So, BEAR
BRAND CHOCO is a mix of both taste and health. Thus, this product is creating value
to its target group.
Internal environment of Nestle
Nestle has well satisfied employees, who strives to attain the goals of the organization
with enthusiasm and hard work. They constitute a major part of internal environment of
an organization.

Resources of Nestle have been efficiently employed to the maximum extent.

Nestle has created satisfaction among customer. Thus, it has a good reputation among
customers.

Nestle has good expertise who are capable of delivering their ideas which can achieves
the organizations goals and objectives.

External environment of Nestle

Competition: Nestle is facing competition largely. Nestle has played a good role in
facing the competition.

Market: Nestle has very efficiently managed the market demand by proper market
research.

Technology: Nestle has adopted the best technology to produce its products.

Thus, all these above mentioned aspects clearly indicate the internal and external
environment in which Nestle has been situated. While launching a new product Nestle
has to keep in mind all these environments. Nestle has to fore see the environment by
adopting the opportunities which is prevailing in the environment. Nestle has to put
effort in converting its weaknesses into opportunities and using strength to face the
threats present in the environment.

Marketing Strategies
International Strategies adopted by Nestle:
Nestlé’s strategy has been to acquire local companies in order to form a group of
autonomous regional managers who know more about the culture of the local markets
than Americans or Europeans.
Nestlé has employed a wide-area strategy for Asia that involves producing different
products in each country to supply the region with a given product from one country. For
example, Nestlé produces soy milk in Indonesia, coffee creamers in Thailand, soybean
flour in Singapore, candy in Malaysia, and cereal in the Philippines, all for regional
distribution.
Another strategy that has been successful for Nestlé involves striking strategic
partnerships with other large companies. In the early 1990s, Nestlé entered into an
alliance with Coca Cola in ready-to-drink teas and coffees in order to benefit from Coca
Cola’s worldwide bottling system and expertise in prepared beverages.
Nestle employ local staff. Local employees better know and understand the local culture
and business procedures. This can result in a more efficient way to respond adequately
to local demand conditions, therefore increasing the company’s market share and
profitability.
Nestlé’s strategy for business development
Nestle enters in an early stage the emerging markets, in order to establish a network
there before competitors.
Nestle simply purchases local brand names which the consumer is accustomed to. This
helps the company to overcome cultural barriers and customer resentments to foreign
brands.
Nestles’ strategy is to establish a basis and then expand into more niches as demand
rises.
Other strategies adopted by Nestle:
Nestlé established its “expatriate army” which is a group of about 700 managers who
have a lot of experience in doing management activities in foreign countries. These
managers are highly educated and trained in order to enable them a worldwide field of
operations.
Another approach is to form SBU’s. These units formulate the high level strategic
decisions on a worldwide basis, while each of these SBU’s focuses on a specific
segment: chocolate, infant food, cereals, coffee etc.
Overall strategy development such as acquisition and market entry strategy these
SBU’s form an important part of the company’s decision making and operating process.
Nestlé’s marketing mix includes the following:

 Product
 Price
 Promotion
 Place

Product
Nestle has launched BEAR BRAND CHOCO which is a health drink specially for kids
and moms. Aside from its irresistible chocolatey taste, BEAR BRAND CHOCO has the
goodness of milk. Just like your trusted BEAR BRAND Filled Milk Powder, it is fortified
with resistance-building Zinc and Vitamin C. These are essential nutrients that help fight
sickness and fatigue. BEAR BRAND CHOCO is nutritious and delicious with affordable
price.

Price
Customers directly relate price to quality, particularly in case of products that are ego
intensive of technology based. Nestle, being a company that emphasizes product
quality, it tends to sell its products with price affordable to all.

Market Penetration Strategy

Nestle has adopted market penetration strategy since they have to penetrate the market
as much as possible and for them income is not so critical and rapid market penetration
for eventual market control is desired Thus, the price for such product is very low.
BEAR BRAND CHOCO is a budget friendly pack available in different pack size. BEAR
BRAND CHOCO comes in two pack sizes, namely the 300g pack, which is good for 10
servings and the 60g pack, which contains 2 servings. A serving only costs P7.50*.

Promotion
Nestle is mainly focusing on advertisements which is considered to be a very good
medium of promotion. It has a good reach among the customers. Moreover, Nestle has
adopted various other modes of promotion like magazines etc.

The Push Strategy maximizes the use of all available channels of distribution to “push”
the offering into the marketplace. The Pull Strategies involves direct interface with the
consumers. It focuses in advertisement rather than various channels of distribution.
Thus, Nestle is focusing on both Pull and Push Strategy.

Place
Nestle has targeted almost all the areas including rural areas and urban areas. In
almost all the super-market and all other out-lets Nestle products are available. All the
customers seem to be very happy with the availability of Nestle product in the market.

Addition Consideration
Based on the above mentioned information, a critical SWOT analysis can be made with
the help of available information. SWOT analysis helps an organization to understand
their strengths and weaknesses and also to have an idea about what the opportunities
available to them outside and what are the likely threats they can face in future.

Strengths
Global food producer, located in over 100 countries. Consistently one of the world’s
largest producers of food products, with sales in the USA in 2008 of $10 billion; sales
and earnings in 2008 were better than expected, even in a downturned economy.
Repeatedly ranked as the world’s largest bottled water company and have set up
facilities to operate water resources in a responsible manner.
Nestlé was named one of “America’s Most Admired Food Companies” in Fortune
magazine for the twelfth consecutive year.
Nestlé provides quality brands and products and line extensions that are well-known,
top-selling brands including:
Lean Cuisine, Yoplait, Maggi, Dryer’s/Edy’s, Haagen-Dazs, Stouffer’s, Boost, Dibs, Hot
Pockets.
Chocolate and Candy: Kit Kat, Toll House, Butterfinger, Baby Ruth, Crunch Bar, the
Willy Wonka Candy line.
Pet Products: Purina, Alpo, Cat Chow, Fancy Feast, Friskies, Tidy Cat.
Drinks: Carnation, Perrier, Nesquik, S. Pellegrino, Nescafe, CoffeeMate, Taster’s
Choice, Juicy Juice.
General Mills: subsidiary which makes Betty Crocker, Bisquick, Hamburger Helper,
Pillsbury, Old El Paso, cereals, fruit snacks, frozen pizza, canned soups, frozen
vegetables, ready-made frozen meals.
Gerber: baby formula, prepared baby foods, baby cereals, water, juice, yogurt, foods for
infants, toddlers and preschoolers.
Professional brands sold to restaurants, colleges, hotels, and food professionals
including Jenny Craig meals, Impact liquid meals for trauma patients, liquid meals for
diabetics, and OptiFast weight loss products.
Successful due in part to their unquestionable ability to keep major brands consistently
in the forefront of consumer’s minds (and in their shopping carts) by renovating existing
product lines, keeping major brands from slipping into saturation/decline and having
superior access to distribution channels.
Weaknesses
Their LC-1 division was not as successful as they thought it would be in France. In the
late 1980s, Dannon entered the market with a health-based yogurt, and become the top
selling brand of yogurt; Nestlé’s 1994 launch was behind the product life cycle curve in
an already mature market and could not compete against a strong, established brand.
Growth in their organic food sales division was flat in 2008, even though the industry
grew 8.9%.
Since 2004 the breakfast cereal industry has been under fire from the FDA and the
American Medical Association, both of which say that false claims of “heart healthy” and
“lower cholesterol” need to be removed from packaging and advertising. They have also
been forced to reduce the amount of sugar in their products, as parent’s advocates
groups claimed they were contributing to the diabetes epidemic among American
children.
General Mills is an experienced, established brand and are the market leader in the
USA, however, they have been lacking in innovation, have not cashed in on the
booming health food craze and have been behind in creating new, niche products,
especially in their yogurt division, where Yoplait is the only brand making a profit.
In 2008, although their products did not carry the recalled pistachios, several of their ice
cream brands, Dryer’s, Edy’s and Haagen-Dazs, were still plagued with bad PR and
loss of sales.
Opportunities
In today’s health conscious societies, they can introduce more health-based products,
and because they are a market leader, they would likely be more successful.
Provide allergen free food items, such as gluten free and peanut free.
They launched a new premium line of higher cacao content chocolates dubbed Nestlé
Treasures Gold, in order to cash in on the “recession economy” in which consumers cut
back on luxury goods, but regularly indulge in candy and chocolate. Americans want
luxury chocolates, and high-end chocolate is immune to the recession (so far), because
it is an inexpensive indulgence.
Opened Nestlé Café’s in major cities to feature Nestlé products.
Threats
Any contamination of the food supply, especially e-coli. Their Toll House brand cookie
dough was recalled in March of 2009 because of e-coli. Outbreaks were linked to 28
states and the product had to be recalled globally. Nestlé has yet to find out how this
happened, and is still investigating.
They were affected by the pet food recall in 2007, in which 95 different brands of dog
and cat food was recalled due to contamination with rat poison. Also in 2007, FDA
learned that certain pet foods were sickening and killing cats and dogs. FDA found
contaminants in vegetable proteins imported into the United States from China and
used as ingredients in pet food.
Raw chocolate ingredient prices are soaring; dairy costs alone rose 50% in 2008, this
cuts heavily into their profit margins and often gets passed on to consumers, by
shrinking the packaging in a way that is almost unnoticeable-therefore the consumer is
paying the same prices for less product.
They have major competitors, like Hershey’s, Cadbury-Schweppes (owned by Pepsi),
Lindt and Ghirardelli, Kellogg’s, Post, Starbucks, Beech-Nut, Quaker, Kraft Foods,
Dannon, Del-Monte, Iams, Earth’s Best, Heinz, Frito-Lay (owned by Pepsi).
Conclusion
Nestle can earn greater return from its distinctive competencies, i.e. unique strengths
that allow a company to achieve superior efficiency, quality, innovation and customer
responsiveness. By applying those competencies, and the products they produce, to
foreign markets where indigenous competitors lack similar competencies and products,
Nestle can realize enormous returns.
Furthermore, Nestle can take advantage of location economies. Location economies
arise from performing a value creation activity in the optimal location for that activity,
anywhere in the world. The optimal location for a value creating activity lowers the costs
of value creation therefore helping the company achieve a low-cost position.
Nevertheless, Nestle must evaluate basic entry decisions before entering an emergent
market. The company has to make a choice among different foreign markets on the
basis of their long-run profit potential. Nestle has to balance the benefits, costs.
 Sales Recruitment Process:

 Step 1: Application
Once you have found a role where you feel you can add value, and that meets
your experience and capability, use our e-Recruitment system to apply.
 Step 2: Selection
Once we receive your application, we’ll analyze your skills and experience to
assess your match to the role profile. You’ll then be contacted by one of our
recruitment team.
The next phase is a series of individual interviews with the Human Resources
team – either by phone or face-to-face interview. If you’re successful, you will
then be interviewed by the appropriate hiring
manager. It is worth noting that we’ll be looking at your potential fit with our
culture as well as exploring your achievements and motivations.
Throughout the process, we’ll use competency-based interviewing techniques
that will draw on your experiences and real examples from your professional life.
If you are applying for a graduate position and you are successful at interviewing
stage, you may be asked to an Assessment Centre. Here you’ll be assessed
alongside other candidates and you’ll have the opportunity to demonstrate you
have the knowledge, skills and abilities to make a lasting impression.
 Step 3: Assessment and Testing
Psychometric testing
The assessments we use cover the following areas – abstract, verbal and
numerical reasoning as well as personality and motivational profiling
We use this to give us additional information on your suitability for the position
that you are applying for. You will be given the opportunity to receive verbal
feedback as part of the psychometric testing stage.
Case studies
A case study is an opportunity for you to showcase your experience.
You will be given a scenario relevant to the job you've applied for, and be asked
to prepare a short presentation or response. You will present this back to the
hiring manager, whilst at the same time, receiving verbal feedback on your
approach.
Medical assessment
Some positions may require you to undergo a pre-placement medical
assessment. The details of an assessment will be given to you if relevant to the
position you are applying for.
  Step 4: Reference and background Check
Our team will conduct at least two reference checks from your previous
employers to ensure that your potential fit with our culture is right, as well as
exploring such things as your management and leadership style.
Your right to work in the country of your employment, and original copies of your
qualifications, will also be validated by our recruitment team.

 Step 5: Job Offer

The first thing we offer you is congratulations on reaching this stage. We’ll welcome
you to the Nestlé team and give you more information about your induction. To reach this
stage generally takes about nine weeks.

 STEP 6:Induction
Our induction programs vary from market to market. However, they all include a
welcome to your department, an introduction to your function and role objectives,
and an overview of our business. We will ensure that you have the information
you need to meet the responsibilities and obligations of being a Nestlé employee,
as well as give you a thorough understanding of our business principles, global
roadmap, and the way our business is structured across the Oceania region.
Throughout your first few months, you’ll be provided plenty of opportunity to
access all the tools and support you will need to succeed.