INTRODUCTION

Nestlé is the world's biggest food manufacturer, with around 450 factories spread across the
globe, and a portfolio that ranges from baby foods to pet care, from chocolate to mineral water.
Its world-famous brands include Nescafe, Kit Kat and Perrier, among many others. The group
also owns a large shareholding in cosmetics company L'Oreal. As with other food companies,
recent years have seen a greater concentration on a focused food and beverage business. In
particular Nestlé has leveraged its performance in sectors such as ice cream and pet foods with
an aggressive acquisition strategy. At the same time, it has placed health and wellness at the
forefront of its agenda, developing the widest possible range of nutritionally balanced products
under the overall umbrella "Good Food, Good Life". Advertising Age estimated global measured
advertising expenditure of $2.62bn in 2009, making Nestlé the world's #5 advertisers. Adbrands
coverage of Nestlé is split across several different pages. See also regional coverage of Nestlé
USA, Nestlé Latin America, Nestlé UK, Nestlé Australia and Nestlé Japan and brand-specific
coverage .

Nestlé's corporate objective is to be the world's largest and best branded food
manufacturer, whilst ensuring that the Nestlé name is synonymous with products of the highest
quality. In recent years, the company has pursued a policy of expansion and diversification
through acquisition and divestment to achieve a more balanced structure to the business.
Global brand names can achieve substantial production and purchasing economies of scale
and, as world travel increases, so does the importance of instantly recognizable products. With
a product portfolio which includes eight of the thirty top selling confectionery brands, such as
Quality Street, Aero, Smarties, Polo and Rowntree's Fruit Pastilles, Milky Bar and After Eight, it
is extremely important that the marketing objectives for each product line are fully compatible
with the overall objectives of the company as a whole. Like any group of individuals, each
product has its own character, strengths and weaknesses and consequently, the marketing
objectives of each product need to be specifically tailored.
 SCENARIO
In Malaysia, the market for chocolate bars is highly competitive. There are a small number of
large firms in the industry – Mars, Cadbury and Nestlé being the most well known. Many of the
brands in the market have been in existence for a long time and have a high amount of brand
loyalty. Openings for new products therefore are limited. There are many examples of products
that have been launched and which have been withdrawn because they could not sustain long-
term sales success such as Prize Bar, Aztec and Junglies.

The market for certain types of chocolate bar has changed in recent years. The growth of the
snack chocolate became popular as people ate chocolate on the go as opposed to sitting down
in a room with a traditional bar of chocolate. Companies had to respond to these changes.
Rowntree (now owned by Nestlé) changed the shape of their Aero bar and Cadbury brought out
a rival bar called Wispa. Both of these were designed to exploit this growing market.

The market is still changing but using chocolate as a snack as opposed to sharing a bar amongst
a family or giving chocolate as a gift is still a growing part of that market. And now Nestlé is trying
to be number 1 chocolate manufacturer in Malaysia.

As a marketing student, you are required to answer all the questions below based on the case
study given and should be transformed into a discussion paper. The discussion paper should
answer the following questions:

1. Present two definitions of marketing and compare both definitions.

2. Identify the main characteristics of a marketing-oriented organization of Nestlé with an
example provided.
3. Explain in great detail of at least three (3) elements of the marketing concept and relate
your answer with Nestlé.
4. Provide an indication of the likely costs and benefits to Nestlé in adopting a marketing
approach.
 1. Present two definitions of marketing and compare both definitions.

Answer:

For the first definition, marketing means the management process through

which goods and services move from concept to the customer. As a practice, it consists
in coordination of four elements called 4P's. The first is identification, selection,
and development of a product. The second one is determination of its price. The third is selection of
a distribution channel to reach the customer's place and finally is the development
and implementation of a promotional strategy.

The second definition, marketing is defined as the management process responsible

for identifying, anticipating and satisfying customer requirements profitably.

Both are the answer for definition of marketing. For the first answer, it explains the
marketing in terms of marketing conceptual that being used by the customer itself. It is more to
customer needs and wants for their satisfaction. It shows that marketing is differ from selling
because selling concerns itself with the tricks and techniques of getting people
to exchange their cash for your product. It is not concerned with the values that the exchange is
all about. Marketing also consisting of a tightly integrated effort to discover, create, raise, and
satisfy customer needs.

For the second definition, the marketing is a part of management process to achieve the
goal which the satisfaction that comes are from the customer demands so that they will get on
what they pay and what they want. Demand means the amount of a particular economic good or
service that a consumer or group of consumers will want to purchase at a given price. So, of
course the demand by them will give the benefits and profits for themselves of course.

We can see that from the both definitions, it shows that marketing are based on
identifying on what customer needs and wants for their own satisfaction. Marketing is also
based on the demand made by the customer. So, if there is no demand, no marketing happens
in business. Marketing requires co-ordination, planning, implementation of campaigns and a
competent manager with the appropriate skills to ensure success.
 Marketing objectives, goals and targets have to be monitored and met, competitor
strategies analyzed, anticipated and exceeded. Through effective use of market and marketing
research an organization should be able to identify the needs and wants of the customer and try
to delivers benefits that will enhance or add to the customers lifestyle, while at the same time
ensuring that the satisfaction of these needs results in a healthy turnover for the organization.

So, when we talk through Nestlé, they also do market in the same way too as in their
business organization and operation. They do having decided its corporate objectives and
strategy, Nestlé can set marketing objectives for each of its product lines and profit centers. For
example on the chocolate bar produced by Nestlé, the primary objective for Kit Kat is to
maintain its position as the UK's number one selling confectionery brand. In order to achieve
this, Nestlé has to develop a marketing strategy that will take into account all the elements of
the marketing mix.

This will involve individual strategies for pricing, product development, promotion and
distribution. For an established brand name, these strategies must be flexible and relevant to
each new generation of consumers, but at the same time, great care must be taken not to
damage the perceptions of the product built up over decades of marketing. Kit Kat has a
particularly broad consumer profile and is popular with all age groups. The Kit Kat marketing
strategy can be summarized by the line 'Broad in appeal, young in feel and big in stature.'