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Segmentation Targeting And Positioning Of

Nestle Marketing Essay


Nestles promising to providing quality products to Singapore people. dates back more than 90 years ago trading MILKMAID
condensed milk by Anglo-Swiss Condensed Milk Company.
After the some years it has been provided in Singapore for Singaporeans, Nestl has won the trust of Singaporeans for
being a food maker with the maximum safety and quality measurement with this products.
Nestl started its business and operation in Singapore in 1912 and has become successful in this country, largely as a net
result of its operating principles. These seek primarily to:Offer Singaporeans the mostly safety and quality measurement in our food and beverage products in Singapore.
Nestle Utilized the most new and up-to-date advance technology and its accounted science-based experienced in the
manufacture of milk food products.
Nestle takes its broad responsible partner as a corporate citizen member by availability in community and social projects
that contribute to the speedy development of the country.

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Nestl brands are household names in Singapore and very well-known company. These include MILO, NESCAF, MAGGI,
NESTL NESVITA OMEGA PLUS ACTICOL, KIT KAT, PURINA, FRISKIES and many of other market competitors in their
product categories.

Segmentation, Targeting & Positioning of Nestle.

Executive Summary
Nestle is global company of milk products and nutrition, chocolates, beverage,
catering and many type of confectionary goods. It has its millions of customers worldwide. Today Nestl Singapore Limited is
on good positioned to grow through its business policy of constant innovation and renovation, concentrating on its core
competencies and commitment to better and high quality, with the aim of availability to the best quality food to the people of
Singapore. In the report we have brought a discussion about the marketing segmentation of Nestle, their target market and
positioning strategy in Singapore. The way Nestle chooses its different core customers different needs with a better way and
how it fulfilled satisfaction its consumers by making greater facilities by the aggregate of different products or marketing
mixes is shown in market segmentation of Nestl. In the area of market viewing we have talking how Nestle have made
many segments and decided to expand their whole business in whole Singapore. In the end of this we have talking how
Nestle available to the customers point more Efficiently and effectively comparing with their other manufacture competitors in
the highly challenging food& beverage market of Singapore by making differentiation of target Users and customers.

Nestle is the biggest nutrition and foods company in the globe, established his headquarter in Vevey, Switzerland. The
journey of Nestle begins with Henri Nestl developed the first milk food for early in 1867, and saved the life of a neighbors
child. This man makes a food for the needy babies who are not able to take mothers feed can use food as an alternative
food. Henri Nestle left his job in 1875 but the Nestle was going on a top speed. In the coming year the Nestl company
introduced condensed milk, so that the company became direct and strong rivals. After that the company was joined in 1905
with the a firm named Anglo-Swiss Milk company which was established by
two brothers named George Page and Charles Page. The firm reenter significantly during the First World War though it fall
in debt, a banker provide facility and help it to less its debt. After the 2nd World War , the company eventually increased its
providing beyond its firsty condensed milk and infant formula products. The 1920s saw Nestl's first enter into new products,
with chocolate the Nestls second big important activity. Nestl felt the effects of World War II immediately. Profits
decreased from US$200 lakhs 1938 to US$60 lakhs in 1939. But after the World War II was the starting of a dynamic
phase for Nestl. Growth speeder and companies were taken. At this time the company operates in 86 countries around the
world and hired manpower around 283,000.

Theoretical Consideration
Marketing Strategies:
The Strategic plan provides the companys overall mission and objective and new hpopes to achieve companys views.
Through market segmentation, targeting and positioning the company takes decisions which customers it will provide and
how. The company also makes designs a marketing mix made up of factors under its control product, price,
place, promotion.

Strategy of Nestle in Singapore:


Nestls required strategy is to cover only the developed area of Singapore.
Thats why they are doing their activities in main and metropolitan cities of Singapore. They want to put babies and children
healthy and ensure their sufficient nutrition. Thats why main and large range of their products are baby milk food products.
They also target new age generation to build a strong relationship by providing various eatable products. In the information,
we are going to point outs of Nestle is to segment, target the potential customers and to positioning of their profitable
products. Their segmentations, targeting, positioning process are given below. Nestle want to change customers toward their
products.
Thats why they are offering new products regularly. They also provide many social competitions for babies to go
their mindset. In this report we are looking to focus of Nestle Singapore is to
segment, target the major customers and to position of their profitable products. The relevant information is given below:-

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Market Segmentation:
The marketing concept asks for understanding customers requirements and satisfying their requirements and needs better
than the others do. But many customers have different requirements and it hardly chance to satisfy all customers by treating
them same just like. Market segmentation is the searching of part of the market that are not similar from other. Segmentation
provides the firm to good satisfy the needs of its major customers.

1. Clearer understanding of the requirements and needs of selected customer groups.


2. More effective positioning in this place.
3. Greater precision in selecting promotional Transportation vehicles and techniques.

Bases for Segmentation:


Users markets can be divided on the basis of these customer characteristics.
1. Geographic area
2. Demographic area
3. Psychographic area
4. Behavioral area

Geographic:
Nature: Nestl Singapore segmented its market for Nescafe Ice depends on the geographic weather: warm hot and cold.
Nescafe Ice: A coffee which may be consume with ice. During warm season consumers making this coffee with normal,
chilled or cold water mixing ice cube to bring freshness in their body.

Demographic Age:
Nestl segmented market area for its main products based on the genration. For the products Cerelac, Lectogen, Koko
Krunch, Nido, Nestle divided the market area segment for new born baby and children of different ages.

Nido
It is nutritious milk specially makes for children 2 years onwards. It includes 25 minerals and vitamin D which helps childs
growth.

Cerelac
: Nestle also provide cerelac for new aged baby. It contains milk and rice mixture for less than one years baby. It fulfills
babys proper nutrition in foods.

Nesquick, Koko Krunch


: above are chocolate milk for babies. Nesquick and Koko krunch contain childs required growth. Its very sweet and
delicious and also includes vitamin protein, mineral.

Lactogen
: Nestle Singapore brings full cream milk powder in the country. It gives baby required nutrition. Lactogen one is for childs
whose age not more than 6months and lectogen 3 is for babies whose age is below 1 year.

Income
: Nestle segmented their market based on customers earnings in an effective way.

Occupation
: Nestle segmented the market based on their users occupation.

Nescafe classic
: This product is for that type of persons those who work busy and hard and requireds more freshness. Both the male
and female who need more caffeine and this type of needs Nescafe classic is for them.

Psychographic:
Life style and personality: Nestle Singapore provides KIT KAT these people who really want to taste and enjoy chocolate.
Nestle Nescafe 3 in 1 is for specially those users and customers who are really ingaged in activity and do not have more
time. They can use by taking Nescafe 3 in 1.All the things are mixed sugar, milk and coffee.

Behavioral
Benefits
Based on benefits Nestle Singapore segmented their market in an efficient way. So they make available Cerelac for those
customers who want more profit from the product. Cerelac includes a high nutrition for babys whose age is less than 1 year.
Two very important things rice and milk remain added in cerelac. On the other part, cerelac includes vitamin, more mineral
and all major useful nutritious elements for babies.

Target Marketing:
Market segmentation reveals the firms market opportunities. Then the firmsort market targeting by evaluating the many
types market segments and deciding which and in which quantity segments it will target.
Nestle examined the different type of market segments on the basis
of segment size and growth, segments, structural attractiveness, and Nestle objectives and resources and decided to
introduced their operation whole of Singapore country. Nestle distributes their target market because of having unique
requirements and wants. Nestle Singapore selected their target market into two market coverage policy:

Differentiated
: Nestle also choose the differentiated marketing. He provides different product for many segments based on different ages,
occupation, season and climate of Singapore.

Nescafe 3 in 1
: Coffee for customers who are busy in life.

Koko Krunch, Nesquick


: Chocolate milk who want to get taste of real chocolate.

Nescafe Ice

: Cold coffee for the customer in hot and warm weather.

Concentrated:
Through concentrated marketing, Nestl earned a strong market position because of its very good knowledge of consumer
requirement.
In theniches it serves and special reputation it acquires. Nestl specializes in producing baby foods. It offers nutritious milk
powder Lectogen 1 for babies whose age is less than 7 months and lectogen 3 for babies whose age is not more than
12month. It also make available baby nutrition cerelac for baby more than 12 months.

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Positioning Strategy:
By creating product, service, channel, people and image differentiation Nestle arrives the consumer touch point more easily,
effectively & efficiently in comparing with other competitors in the highly competitive food processing market.

Product Differentiation
: Nestle brings a many of product for target customers.
They make available 25 types of minerals in Nido for children.
It also arranged Cereals and Lactogen 1 &3 for newly born baby exclusively.
Now the doctors says these products for childs to their parents for great & maximum
nutrition Nescafe is a product which contains 4 types of categories. They offer Nescafe ice for hot and warm weather,
They provide Maggi including Maggi instant; Maggi 2 minutes which Includes and contain various minerals, vitamins and
nutritions.

Channel Differentiation
: Nestle reach their products to the customersthrough their experienced market salesman and transportation. So that their p
roducts.
are much easy to their customers.

Image differentiation
Nestls logo is totally different from others competitors that are greatly choices by its users.
For that way customer easily choose them in the market which is another effective benifits for Nestle products.

People differentiation

The company has a large number of manpowers that are highly educated and trained. In Singapore, 400 employees are
employed in market Company chairman; They are running this business successfully for a long time.

Service differentiation
Another advantage for this company is better service for its respective users from its competitors. They provide
24x7 hot line service. High quality checking is providing for its customers. Its marketing dept. and public relation dept. are
working for finding out customers new needs and response toward their nestle products.

Positioning Statement Baby Products


To babies who are deprived of proper nutrition,Nido,Cerelac,Lactogen are the very nutritious milk Product that provide you
more use full nutrition different from any other brand because these includes different types of vitamin, mineral etc.

GOOD FOOD for GOOD LIFE


Conclusion
The advent of consumer food products has brought an immense change in the field in the consumers food habit. Nestle has
done well to adding its customers loyalty operating as a market competitors in its industry.
Nestle is one of the largest food processing company. Their products and quality mainly includes on their experience and
efficiency. Nestle provides quality that leads to good business growth and good
development.It has segmented the market based on certain clustered preferencesdeploying multi-stage segmentation
approach to meet individual requirements of the customers. Offering brand new products would also close its old products
gaps to a great extend promise satisfaction and loyalty. In our report, we contribute to make available the segmentation,
target marketing and positioning strategy of Nestle and suggest some recommendations based on the marketing procedure.

IMC Stratgies
PROMOTION
Promotion activities perform a major role in re-launching any product. Addition in target market is make sure by personal
selling. It adds persons in small stores describe the benefits to important customers about importance of milk in
standard packed form. Awareness performs the most important role. They should taste housewives on many places.
Because they are the main servers of such kind of nutritional diets to their members of family.
There are many promotional methods like personal sales, advertisements, sales promotions, public relations etc. but the
method accepted by Nestl for introducing Nestl UHT Milk was advertising, outside printed media for advertising like,
hording board, newspaper, posters outdoor etc. Nestl seeing the old customer of the imported brands and potentials
customers via its advertising promotions. In their advertisement, Nestl mostly focus the small kids who are the
major portion of our population and milk and such kinds of Products are main requirement of enhancing ability
in children that the reason Nestle launched Nesvita Milk product especially designed for younger children because addition
of calcium diets in routine diet chart is main requirement. To remind the consumers about the nestle, Nestl also made some
special platform for retailers and hold them on their shops and as make difference to other milk providing companies running
in the country Nestle shows always attracting messages to feels customers that always drink milk but only I real form .

RE LAUNCHING
large number of competitors Nestle takes decisions to re-launch it product with different new packing. It was an opportunity
for Nestle to control the market in that a way that it will introduce. its all the discrepancies such as shortage, inflation based
pricings which given opportunity to the competitors to control the market.

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BELOW THE LINE


Below the line includes following mediums of advertisement.
Direct mail to users
Outdoor advertising
Through Transit

DIRECT MAIL ADVERTISING


It is any form of advertising present directly to the new comers, this can be through the mail, fax, online computer services,
sales personnels, retailers or other means rather than through traditional mass media.
Leaflets/ flyers
Nestle has distributes many types of leaflets, which inform information about
Nestle Milk products, at different outlets.
Folders / brochures
Nestle distributes brochures of their product to their users through internet to make them inform of new research and
innovations and products. This helps nestle in adding more customers.

OUTDOOR

Nestle expenses a big share of their advertisement budget on the outdoor advertisement in Singapore, which includes
Painted Billboards at different places
MMT in various locations
Vinyl Sheets located in public places
They have put on different themes of them, which are presenting different situations in which
people are using real water. According to the NESTLE they perform heavy outdoor advertisement to aware people about the
presence of their product due to it is a product for which consumer never pre-determined plan to purchase it so to encourage
them for the purchase of Nestle Milk Products they have to place billboards. Beside this they
rotate the posters of their billboards after some months the reason for this is that users not interest in those themes when
they see it for a longer time so when they exchange them and place the new different one that create the interest among
the people.
TRANSIT ADVERTISING
Transit advertising is a type of public places out of private media that adding bus and
taxicab advertising as well as posters on transit places, Bus terminals, and Display at airports
.Types of transit advertising
Inside cards in public transports
Outside posters on Vehicles
Terminal posters at various locations
Taxi / bus walls.
Nestle 2010 Creating affordable access to protein [online] Available from:
http://www.nestle.com/CSV/CSVinAction/SlideShows/essentialprotein/essentialprotein.htm
Nestle 2010 Press Release [online] Available from:

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Middle East should be able to sell throughout the region, thereby


realizing scale economies. Inanticipation of this development,
Nestl has established a network of factories in five countries
inhopes that each will someday supply the entire region with
different products. The companycurrently makes ice cream in
Dubai, soups and cereals in Saudi Arabia, yogurt and bouillon
inEgypt, chocolate in Turkey, and ketchup and instant noodles in
Syria. For the present, Nestl cansurvive in these markets by
using local materials and focusing on local demand.The Syrian
factory, for example, relies on products that use tomatoes,
a major local agriculturalproduct. Syria also produces wheat,
which is the main ingredient in instant noodles. Even if trade
barriers dont come down soon,
Nestl has indicated it will remain committed to the region.
Byusing local inputs and focusing on local consumer needs, it has
earned a good rate of return inthe region, even though the
individual markets are small.Despite its successes in places such
as China and parts
of the Middle East, not all of Nestls
moves have worked out so well. Like several other Western
companies, Nestl has had itsproblems in Japan, where a
failure to adapt its coffee brand to local conditions meant the loss
ofa significant market opportunity to another Western company,
CocaCola. For years, Nestls
instant coffee brand was the dominant coffee product in Japan. In
the 1960s, cold canned coffee(which can be purchased from soda
vending machines) started to gain a following in Japan.Nestl
dismissed the product as just a coffee flavored drink, rather than
the real thing, anddeclined to enter t
he market. Nestls local partner at the time, Kirin
Beer, was so incensed at
Nestls refusal to enter the
canned coffee market that it broke off its relationship with
thecompany. In contrast, Coca-Cola entered the market with
Georgia, a product developedspecifically for this segment of the

Japanese market. By leveraging its existing distributionchannel.


Coca-Cola captured a canned coffee in Japan. Nestl, which failed
to enter the marketuntil the 1980s, has only a 4 percent
share.While Nestl has built businesses from the ground up in
many emerging markets, such as Nigeriaand China, in others it
will purchase local companies if suitable candidates can be found.
Thecompany pursued such a strategy in Poland, which it entered
in 1994 by purchasing Goplana, the
countrys second largest chocolate manufacturer.
With the collapse of communism and theopening of the Polish
market, income levels in Poland have started to rise and so has
chocolateconsumption. Once a scarce item, the market grew by 8
percent a year throughout the 1990s.To take advantage of this
opportunity, Nestl has pursued a strategy of evolution, rather
thanrevolution. It has kept the top management of the company
staffed with locals

as it does inmost of its operations around the world

and
carefully adjusted Goplanas product line to better
match local opportunities. At the same time, it has pumped
money
into Goplanas marketing,
which has enabled the unit to gain share from several
other chocolate makers in the country.Still, competition in the
market is intense. Eight companies, including several foreignownedenterprises, such as the market leader, Wedel, which
is owned by PepsiCo, are vying for marketshare, and this has
depressed prices and profit margins, despite the healthy volume
growth
MANAGEMENT STRUCTURE
Nestl is a decentralized organization. Responsibility for operating
decisions is pushed down tolocal units, which typically enjoy
a high degree of autonomy with regard to decisions
involvingpricing, distribution, marketing, human resources, and
so on. At the same time, the company isorganized into seven
worldwide strategic business units (SBUs) that have responsibility

for high-level strategic decisions and business development. For


example, a strategic business unitfocuses on coffee and
beverages.Another one focuses on confectionery and ice cream.
These SBUs engage in overall strategydevelopment, including
acquisitions and market entry strategy. In recent years, twothirds of
Nestls growth has come from acquisitions,
so this is a critical function. Running in parallel tothis structure is
a regional organization that divides the world into five
major geographical zones,such as Europe, North America, and
Asia. The regional organizations assist in the
overall strategydevelopment process and are responsible for
developing regional strategies (an example would
be Nestls strategy in the Middle East, which was
discussed earlier). Neither the SBU norregional managers,
however, get involved in local operating or strategic decisions on
anything
other than an exceptional basis. Although Nestl makes intensive
use of local managers, to knitits diverse worldwide operations
together the
company relies on its expatriate army. This
consists of about 700 managers who spend the bulk of their
careers on foreign assignments,moving from one country to the
next. Selected primarily on the basis of their ability, drive,
andwillingness to live a quasi-nomadic lifestyle, these individuals
often work in half a dozen nations,during their careers. Nestl
also uses management development programs as a strategic tool
forcreating an
esprit de
corps
among managers. At RiveReine, the companys international
trainingcenter in Switzerland, the company brings together
managers from around the world, at differentstages in their
careers, for specially targeted development programs of two to

three weeksduration. The objective of these programs is to give


the managers a better understanding of
Nestls culture and strategy and to
give them access
to the companys top management.
Theresearch and development operation has a special place
within Nestl, which is not surprising fora company that was
established to commercialize innovative foodstuffs. The R&D
functioncomprises 18 different groups that operate in 11
countries throughout the world. Nestl spendsapproximately 1
percent of its annual sales revenue on R&D and has 3,100
employees dedicatedto the function. Around 70 percent of the
R&D budget is spent on development initiatives. Theseinitiatives
focus on developing products and processes that fulfill market
needs, as identified bythe SBUs, in concert with regional and local
managers. For example, Nestl instant noodleproducts were
originally developed by the R&D group in response to the
perceived needs of localoperating companies through the Asian
region. The company also has longer-term developmentprojects
that focus on developing new technological platforms, such as
non-animal proteinsources or agricultural biotechnology products.
Case Questions - Answers
1.
Does it make sense for Nestl to focus its growth efforts
on emergingmarkets? Why?
There has been increased emphasis on local and farm-to-table
products in developedeconomies like North America and Western
Europe. Moreover, the price-war andconsumer bargaining threats
due to the generic brands have definitely hurt market
shares and margins for companies like Nestle. With nearly 3/5s of
the worlds
population living in emerging markets, it definitely should be the
market space thatNestle should focus on. Also, the increasing
standards of living, the familiarity of thebrand due to globalization
and due to the lack of large nationwide supermarkets withgeneric
brands in developing economies
make them the ideal targets for Nestles

growth prospects.
2.
What is the companys strategy with regard to business
development in
emerging markets? Does this strategy make sense?
The core of the companys strategy when it comes to emerging
markets is
Customization rather than globalization
. They take the time to research and develop
products suitable to the specific market, thus making them
accessible to the targetmarket on both a functional and emotional
level. Having personally worked for NestleIndia (specifically in
their instant-nood
le & soup brand Maggi division), I have first
-hand witnessed how meticulous the company is with their
implementation steps. Theflavors of the InstantNoodle are closely matched the familiar masala taste &
spice.The brand Maggi has become synonymous
to instant-noodles in the country due to
the SBUs continued due
-diligence. Every few years, the company evaluates theflavors
and tries to introduce product variations and flavor profiles. They
constantlymanage to interact with the target influencers (school
students) by havingpartnerships with several big private schools
throughout the country. The topmanagement for the Nestle India
division comprises primarily of local executivesreducing any
resistance or hostility from the employees and customers. They
trainedthe employees on both the global as well as the local
perspective of the country andhad several incentive programs to
encourage involvement. I have always admired
their strategy implementation techniques, then as an employee
and now as ananalyst.
3.

From an implementation perspective, what is required for


this strategy towork effectively?

Research, Develop & Customize:


For continued success, the organizationrequires to concentrate
more on customizing the products to suit the localmarkets. Slowly
they can pool taste-similar markets and develop and marketthem
together. For eg. the tastes of the middle-east countries could
be largelyoverlapped and marketed within the pool of countries.
For any firm to succeedglobally, it has to abandon its success
strategies from one market and develop
new plans in every new market it tries to enter. The reason
McDonalds has
been having sustainable growth in several countries is due to the
customizedproduct selection it has carefully developed using indepth research to matchthe needs of the local population.

Evaluate & Re-evaluate:


While research can only take them a certaindistance, experience
takes them the rest of the way. They must be willing,especially in
the newer markets to experiment and continuously evaluate &reevaluate the reception and growth the products have in
the market. Thishelps them alter the products at different stage
of market maturities.

Partner, Merge & Acquire:


To overcome the financial and opportunity costsof developing
new products & brands, they should continue to identifypotential
buyout/partnership opportunities to leverage existing
brands thatmight populate the market. Such strategic acquisitions
could also preventfuture competitor threats.
4.
Is Nestls mana

gement structure and philosophy aligned with


its overallstrategic plan given the markets and countries
that Nestl participates in?Why?
Nestles philosophy, since its inception has been to bring q
uality food products thatmake life convenient to people
everywhere in the world. Their current managementstructure has
executives native to local regions, heading and managing the
marketsquite autonomously from the main company. There is a
flow of information andresponsibilities from the SBUs to the R&D
to the product developers to the managersand thus to retailers.
This interwoven structure ensures that the philosophy of the
company perfectly coincides with the firms strategic plan and
execution
.