Marketing Philosophy of Nestle
Marketing considers a given companies ability to satisfy the needs of a its targeted customers within a market which in return helps the company achieve its aims and objectives which are outlined in a mission statement. Introduction to Nestle Nestle is a globally recognised organisation founded by Henri Nestle in 1866 in Switzerland. Nestle claim to be the ‘worlds leading nutrition, health and wellness company’ and their mission is ‘Good Food and Good Life’. The Swiss organisation employee 280,000 people around the world. Nestle has a vision of ‘meeting the needs of the consumer everyday by marketing and selling food of a consistently high quality’ (www.mba-tutorials.com). The organisation believe the ‘confidence’ that the consumers have in the brands which they produce have helped them to improve their marketing strategies and how they research and develop new concepts.
Nestles mission statement also states they wish to further use e-business to market products and also to ‘deliver the best quality’ in everything they do, such as their production techniques and also how they choose their suppliers as standards are key to Nestles aims and objectives. Analysing the visions of Nestle through their mission statement indicates they are very much a market orientated organisation,
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Product vs. market orientation
Organisation can either be market or product orientated. Being a market orientated business indicates the organisation predominately focuses their attention towards the market they are launching a product into and they also consider the best ways to reach their target audience through different marketing strategies. The advantages of being a market orientated company is that it is easier to adapt to changes in different markets and also creates a sense of loyalty with its customers.
But being a market orientated company results in a large expense due to the amount of research undertaken. A product orientated organisation, on the other hand, tend to primarily focus their attention on the product they are going to launch into a market rather than fully analysing that market itself. The danger of being product instead of a market-orientated organization is that when launching a product into a new and unconsidered market is that the product could not be what the target market are seeking and the competition are likely to have advantages based on their market research.
Organisations that consider the markets before launching a product within gives them an advantage in terms of finding a gap in the market and also finding a unique selling point (USP) which can help gain a greater market share. Although being a product orientated company restrict market knowledge it saves expenses through not focusing on research techniques which can be costly.
The micro-marketing environment directly influences an organisation marketing strategies. The term micro refers to the relationship between an organisation and those factors that influence marketing.
Customers A customer can be defined as someone who uses a service or purchases a product for a conceived value which is measured in monetary terms. Nestles has a range of customers on a global basis. To ensure that customers are fully satisfied Nestle has to provide products that offer value for money and are of a quality which its competitors do not offer the target market. Nestle value their customers which reflects their mission statement as they believe confidence their customers have in them helps them to further understand markets year after year.
The Nestle website is an user friendly website which reflect how important their customers are to them. The ‘contact us’ page implies the organisation are customer focused and want feedback from those customers.
Competition is a major factor in the micro-marketing environment which Nestle has to consider. For Nestle to have an edge over their competition they need to have a good knowledge of what their competition have to offer the market and also how they price their products which is vital as this can be the key o market domination in particular cases. Nestle are currently trying to gain an competitiveness edge over its competition by preparing to launch a new healthy range of food products, this gives them an advantage within the food market they have products in as their main competitors such as Cadburys or other rival confectionary companies are not involved with the health and wellbeing of its consumers, this may also be considered as positive ethical and social marketing.
It is important for Nestle marketers to take into account its suppliers as a shortage or a delay of goods needed to create the products they are launching into a market can have a serious effect on marketing strategies. For example If there is a shortage of a supply which is used to make Nestles cereal which is sold in the supermarkets then the organisation marketers need to be informed so they know not to have special offers such as ‘but one get one free’ that week as supplies will be even shorter due to demand.
Another factor which suppliers have on marketing is the quality of the goods they are providing Nestle as this can have a big affect on whether the organisation can fore fill the desires of its target audience. Substitutes Nestle has to consider other products what are known as substitutes, these are two or more products that are in the same market. Substitutes can be the same type of product or have similar features which consumers can choose between as there is not vast difference.
For instance nestle market a product called Nescafe which is a brand of coffee, a common substitute for Nescafe is Cadburys instant hot chocolate. Although these products are different types of hot drinks they have both been launched into the same market, therefore Cadburys is a threat to Nestles coffee brand Nescafe and its important that the organisation consider all of the possible substitutes for all of their own products and ensure they are informed of their prices so that they can stay competitive within different markets.
New entrants to a market is something that Nestle have to be aware, if they do not keep informed of any new products being launched into a market which they are already involved with then there is a possibility that they could lose a portion of their market share. This is possible through another company producing and launching a new product which has a unique selling point and satisfying the needs of the target market more so than one of Nestles established products. This is why Nestles marketers need to always be aware of any new possible entrants to a market.
Macro-marketing is concerned with PEST (political, economic, social and legal), these are all key to successfully launching a product into a market professionally and ensuring the organisation comply with all legal issues that set by the government. There are sever consequences of organisations not conforming to PEST considerations, a prime example is the Coca Cola company when they launched their brand of water named Dasani which was eventually discovered as tap water, the company breached related legal restraint which served serious consequences and damaged the established Coca Cola brand name to a degree.
As well as the organization causing themselves a bad reputation, they are also creating opportunities for their competitors who will relish the opportunity to take a greater market share through Coca Colas mistakes. Nestle also need to ensure that their advertising complies with legislation set by the advertising standards agency (ASA). Economical factors have to be researched by Nestles marketers before a product is launched into a new market or if that product is already in a market in one country but is being considered for a market in a different country.
This is important for all organisations as issues such as inflation rates in one country can differ in other countries. Inflation rates can have an impact on how successful a product can be within a market as this can affect buyer behaviour which is key for the organisation to understand and respond to. As Nestle are an international brand it is vital that their marketers are able to research one countries current economical position and have a sound knowledge of where is best to launch a particular products and which markets are best to avoid.
Social factors are equally as important as those of political and economical, Nestle need to consider and number of social factors to ensure they are entering markets where their products are demanded by the target market of different cultures. Social factors are concerned with whether the products appeal to certain religions or whether Nestles products reflect the general attitude of those people with the target market.
The correct usage of language is a big social implication on marketing, which was proved by the telecom Orange’s mistake during their 1994 launch of the slogan ‘The future is bright, the future is Orange’ when they launched this slogan in an advertising campaign in Northern Ireland its translated to ‘the future is protestant, loyalist’ which obviously had a major affect on telecom sales within that region. Technological is key for Nestle to gain an advantage over its competitors and to ensure a greater market share for all of its products.
With the use of technology, Nestle has been able to undertake greater research with a wider range of information than what was available the years before technology grew. Not only does technology help improve research techniques it also provides greater means of communication with Nestles internal network, its suppliers, and most importantly its consumers. The ability for the organisation and its customers being able to communicate is key for developing new and improving existing products.
Nestle marketers should always be looking to improve the relationship with its customers and technology is the basis on which to do so. Technology also provides cheaper means of production, as the need for production laborers is forever reducing due to machines being a better replacement which saves in the expenses of employee wages. Within the Nestle mission statement they company outline their ambitions to expand the use of e-marketing through the ever-expanding range of technology which reflects the marketers understanding of the importance of technology in a competitive marketing environment.
Ethical ‘Ethical marketing is concerned with whether the decisions made by companies are morally right or wrong’ (www.learnmarketing.com). Recently organisations have begun to understand how vital it is to market their products with an ethical consideration so they can meet the expectations of the customers and the markets. Many markets have seen this being introduced such as the ‘fair trade’ launch within large supermarkets and also companies such as The Body shop who were one of the first cosmetic based companies to introduce a fair trading scheme with its competitors following suit.
It is important for companies to reflect a good moral image and ethical marketing is one of the strongest techniques to obtain a positive reputation. Nestle being in the food and drink industry have to really focus on health, which is difficult due to one of the organisation main sources of income is through the sales of confectionary goods. But Nestle have tried to branch into new markets through their marketers spotting the opportunity to create a new healthy appeal about the Nestle brand.
The Times newspaper recently published an article which concerned Nestle due to Swiss organisation preparing a ‘new launch of healthy foods’ . This is a very strategic marketing launch as many of Nestles competitors are in the confectionary market which is not reflected upon as a health industry and Nestle marketers are setting their sights on a new target market to help expand the organisation products available to consumers. Nestle are trying to ‘combine food and Pharmaceutical groups’ (The Times, September 10 2010) to encourage non-prescription healthier products for human and also animals.
Another key milestone of ethical marketing for Nestle was the product launch of a bottles water called ‘Pure Life’ which is the ‘biggest bottles water brand in the world in value’ (www. Nestle-waters. com).
Nestle have recently launched a new operation known as Nestle Nutrition which they have labelled it as a ‘global business organisation’ (www.nestlecompetitvestrategy.com) designed to ‘strengthen the focus on their core nutrition business‘.
By the company doing this it shows that they are always trying to find alternative ways to achieve market success in unfamiliar environments and also looking to gain an competitive edge on all other rival organisations. This indicates strongly that Nestle are a firm market orientated organisation and strive to succeed through means of research. As well as the launch of Nestle Nutrition the organisation are also considering the use of ethical marketing which reflect what they are trying to achieve in their mission statement. Which again reinforces their belief in following the aims and objectives within their mission statement.