SCHOOL YEAR : 2009 2010 Creation Date : October 2009
Distribution Date : November 2010
STUDENS NAME
Katharina PETER Anne-Valrie PRUNIER Aleksandra RYBARZ Turul
TUFAN Yue ZHAO
MODULE TEACHERS NAME PROGRAM
Marketing Mix Strategy Laurence COGAN ESC MIM 1, Anglo Group
2
ContentI. Nestl
company.......................................................................................................................4
A.
History................................................................................................................................4
B. Founders and Current
management....................................................................................5
C. Incorporate vision and
mission...........................................................................................5
D. Capital and
stockholders....................................................................................................6
E. Product
families..................................................................................................................6
II. Firms marketing
metrics.......................................................................................................7
A. Evolution of
sales...............................................................................................................7
B. Evolution of
profits............................................................................................................7
III. External environment
...........................................................................................................7
A. Market
segments................................................................................................................7
B. Competition and market
shares..........................................................................................8
C. Political and legal
environment..........................................................................................8
D. Internal environment : Strengths and
weaknesses.............................................................9
IV. SWOT
Analysis..................................................................................................................10
V. Product policy
analysis........................................................................................................12
A. Levels of product
.............................................................................................................12
B. Analysis of the
brand........................................................................................................13
C. Analysis of the
packaging................................................................................................13
D. Products market
share.....................................................................................................15
E. Direct and indirect
competition........................................................................................15
VI. Pricing policy
analysis........................................................................................................15
A. Pricing objective and pricing
policy................................................................................15
B. Value of NaturNes (4 to 6
months)..................................................................................15
C. The different costs of NaturNes for
customers................................................................17
D. Range of pricing in the retailing
stores............................................................................17
E. Range of competitors
prices.............................................................................................18
F. Competitors
policies........................................................................................................18
G. The different factors which influence price formation for
NaturNes...............................19 1. Internal
factors..............................................................................................................19
2. External
factors.............................................................................................................19
H. Estimation of price elasticity from target markets buying
intentions (in ) ..................20 VII. Distribution policy
analysis...............................................................................................21
A.
Suppliers...........................................................................................................................21
B. Channel levels and
intermediaries....................................................................................21
C. Types of retailers: off and
online.....................................................................................22
D. Exclusive, selective or
intensive......................................................................................22
E.
Merchandising..................................................................................................................22
VIII. Promotion policy
analysis................................................................................................24
A. Selected Media for
advertising.........................................................................................24
B. Examples of advertising and
objectives...........................................................................24
C. Types of
promotion..........................................................................................................24
D. Types of Public Relations
...............................................................................................25
E. Types of Personal
Selling:................................................................................................25
F. Push or Pull
Strategy:.......................................................................................................25
APPENDIX..........................................................................................................................27
Appendix 1: The current organization of
Nestl..................................................................28
Appendix 2: The different brands of
Nestl.........................................................................28
Appendix 3: An example of a TV ads of
NaturNes.............................................................30
I. Nestl company Today, French women are joining the workforce
more than the past, they have less time to cook for their children.
Therefore, there is a huge demand for baby food products. As a
result, the baby food market in France has a big possibility for
growth. Between 2001 and 2006, the French market has grown at an
average annual rate of 2.6%. Moreover, according to different
researchs made, French people are the world's largest consumers of
baby foods, buying about 95 kilos of baby food per year. As a
result of this evolution and growth in the baby food market, we
have chosen to analyze the infant nutrition industry and more
especially the brand Nestl NaturNes.
A.
History
The history of Nestl began in the mid-1860s, when Henry Nestl, a
Swiss pharmacist, started to do experiments with different
combinations of milk and other ingredients in order to create a new
product, substitute of natural mothers milk. He wanted to decrease
the mortality among the children, whose organisms did not accept
the natural milk. As a result he invented a new product which was
called Farine Lacte (flavor with milk). His first target customers
were babies who did not accept any kind of milk and had no right to
survive without it. This innovation in a short period of time
became a best-seller in Europe. In 1874 Nestls company, which was
set in Vevey, was bought by Jules Monnerat, who extended the
production by adding the condensed milk. The beginning of 19s.
century was a time of fast development. In 1905, there was a first
merger with Anglo-Swiss Condensed Milk Company. In 1907, the
Company began full-scale manufacturing in Australia, its
second-largest export market. Warehouses were built in Singapore,
Hong Kong, and Bombay to supply the rapidly growing Asian markets.
During the World War I the demand for milk increased significantly.
As a result Nestls production had more than doubled. Ironically,
the World War II emerged the best time for introducing the new
product. For example, Nescafe was the basic drink of US military).
Annual production levels reached one million cases by 1943. The
time after the war was a dynamic phase in Nestls development. In
1947, the company merged with Alimentana S.A., the producer of
Maggi seasonings and soups. The company strengthen its position on
the market thanks to the round of acquisitions: Crosse &
Blackwell (1960), Findus frozen foods (1963), Libby's fruit juices
(1971), Stouffer's frozen foods (1973), Alcon Laboratories Inc.
(1975), Carnation, San Pellegrino (1997), Spillers Petfoods (1998),
Ralston Purina (2002), Mvenpick Ice Cream, Jenny Craig, Uncle
Toby's, Delta Ice Cream, Novartis Medical Nutrition, Gerber,
Sources Minrales Henniez.
From 2007 Nestl cooperates also with chocolate maker Pierre
Marcolini who is a strategic partner of the company.
B.
Founders and Current management
The founder of Nestl is Henry Nestl (1814-1890). The current
management1: Chairman of the Board of Directors, Nestl S.A.: Peter
BRABECK-LETMATHE Chief Executive Officer, Nestl S.A.: Paul BULCKE
1st Vice Chairman: Andreas KOOPMANN 2nd Vice Chairman: Rolf HNGGI
Chairman's and Corporate Governance Committee: Jean-Ren FOURTOU
C.
Incorporate vision and mission
The most important aim of the company is to create value that
can be sustained over the long term by meeting consumer needs for
nutrition, enjoyment, and quality they can trust. Nestl creates
products which are a response to the customer demand. That fact,
indeed, has a great influence on composing new lines of products.
The customer is in the centre of attention and he/she is a direct
inspiration for the company. Nestl is an international company,
which operates in many countries in the world. As a consequence the
company has to adjust to the different legislation. Nestl
emphasizes that, as a minimum, its employees must comply with the
laws applicable in the countries in which it operates.
Additionally, it introduces in each subsidiary the International
Labour Organisation Conventions and the International (WHO) Code of
Marketing of Breast-milk Substitutes, which are the globally
recognized and accepted documents. Nestl fully respects the human
rights and ensures that its own companies are not complicit in
human rights abuses. It also establishes good relations between the
company and its employees. For Nestl, the employees are the most
valuable asset without which the company could not exist. The
company has many subsidiaries in the countries where the child
labour is a very huge problem. Nestls policies totally forbid to
employ children before they have reached the legal age and they
have completed their compulsory education, as defined by the
appropriate authorities. The company does not cooperate with the
suppliers which use children as the workforce.
1
Cf Appendix : The current organization of Nestl
The protection of the environment is also a part of the companys
mission. It introduces new environmental friendly technologies
which reduce the risk of disruption of the environmental balance.
With the Nestl Water Policy, the company wants to protect water as
it is an important resource for making its products.
D.
Capital and stockholders
In 2006, the shares were 267 555 249 euros worldwide. Compared
to 2006, the shares in 2008 amounted to 253 949 396 euros at the
end of 2008. Due to listing no more than 100 000 000 registered
shares with a nominal value of 0,07 euros each, the share capital
increased totally for about 6 630 533 euros.
Nestl company:
ItemCapital expenditure as % of sales Market capitalization (end
December) Earnings per share Dividend (proposed)
Figure3 232 million euros 0.044 99 846 million euros
3,12 euros 0,9 euro
E.
Product families
Nestl offers a wide range of products, which meet consumers
needs. They are divided into eight different groups which includes
many different brands of food and beverage2. Summary of the
different markets where Nestl is present:
2
Cf annexe 2 : The different brands of Nestl.
II.
Firms marketing metrics
A. B.
Evolution of sales Evolution of profits
In 2008, the turnover of Nestl amounted 72.87 billion euros,
plus a net profit of 11.93 billion euros. III. External
environment
A.
Market segments
The French baby food market is the biggest in the world. In
France, each baby eats in average 95 kg of baby food per year.
Furthermore, it is still an increasing market due to the fact that
more women are working. Therefore, they do not have that much time
to prepare healthy food for their baby. In general, women are the
first target of the crisis. In fact, women are the first one to
lose their job and then become housewife. The fact to be unemployed
for the baby food industry has two main effects: First families
will spend less money on baby food products. They will prefer
cheaper brands in order to save money. Then, mothers will have time
to cook and to prepare healthy food for their tot. As a result the
demand for different convenient food is very high. In general the
French market has about 2 million consumers and represents about
471 million euros. Developments of new food technologies are mostly
driven by Nestl and Diepal-NSA
(Danone with Bledina). They have created a new types of food,
new packaging and new recipes. The French market is composed of
four main parts: 40% for the baby milk market, 35% for the packaged
food in little jars, 10% for breakfast and dry food and last 15%
for juices and fresh products. According to some research made by
professionals, customers would like to have baby food with
biological products for a good price. People care more about their
health and also about their wallet. They want to eat biological
products with a good taste and good quality as well. Their worries
are even worse when the products are for their baby. They have high
expectations for the quality and the price.
B.
Competition and market shares
Nestl is one of the leaders on the baby food market in France,
just after Danone. In 2007, it had 33% of the market share. The
unquestionable leader on the market is Danone which two years ago
had 62% of the market share. Its brand Bledina is the most popular
brand in the baby food industry. Also Hipp, a German company, is on
the third place in the baby food industry; but in comparison to
Nestl and Danone its market share is not significant enough (about
1%). The rest of the market share belongs to companies which are
not the high-powered competitors for Nestl (It is the case for
retailer brands).
C.
Political and legal environment
Therefore that the French market is a highly valuable market
some foreign companies try to enter it with their products. But
unfortunately for them, France has very high regulations and
restriction for the import aliments to the country. This means for
example that meat that is not produced in a EU certified
slaughterhouse can not be imported. Furthermore there are certain
taxes that are calculated in according to the number of the
ingredients of the product. Those are high entry barriers for
foreign companies on the French baby nutrition market. Apart from
this, on the market for organic products there are certain
certifications available for the food producer. Parents therefore
can be sure that the government created a legal and controlled
protection for organic food, to a sure that no genetic modified
ingredients are in the
food, that no pesticides are used and that processes are
environmentally friendly. For
example:
which respects European regulations, national and
international
Other important factor of the legal policies concern the maximum
ranges of chemicals within baby food as well as in other grocery
products, for example the level of preservatives, dyestuffs and
flavor enhancer. This is getting more and more important because
further research showed that those additives might make sick,
influence the bodies development process and are unhealthy. At the
moment there are no regulations by the state but consumers are
getting more aware of those food problems and demand products which
contain less or none of those chemicals. Governments might release
policies regarding this issue in the future when there is enough
prove dangerous implications.
D.
Internal environment : Strengths and weaknesses
Nestl NaturNes is the one of the strongest brands on the baby
food market. The prestigious image and the wide range of products
are undoubtedly the greatest strengths of NaturNes. Forty different
dishes for children from 4 months to 1 year fully satisfy customer
needs. The company takes care of the babies health and safety. The
panel of experts constantly controls the production in order to
remain the products up to the standards. The advanced technology of
food preparation and the environmental friendly packaging stand the
company out of the competitors. Nestl is the first company to have
introduced the plastic containers, which are fully recyclable. The
food consists only of organic ingredients prepared in a way which
does not change the taste of the biological products. Nestl
NaturNes success is based also on the promotion which plays a great
role in the companys strategy. The particular target market demands
a specific promotion. Thats the reason why the products
advertisements appear mainly in magazines for parents and medical
magazines. Additionally, the whole campaign is supported by sales
and point of purchase promotions. Of course like every other
brands, NaturNes has some difficulties. Because of the nature of
the market, product life cycle is shorter than the other food
products. This is why, without innovations our brand can lose its
high position among its competitors. The product is common, so it
has to be constantly improved to differentiate it from the other
products on the market. Nestl NaturNess, in spite of its good
image, has only medium quality. The price also seems not to be
encouraging as Bledina, the main competitor of NaturNess, has much
lower prices for the same kind of products.
IV.
SWOT Analysis
Strengths: 1. One of the market leaders in the baby food
industry in France (33% of a market share) 2. Wide range of
products (40 different dishes for children from 4 months to 1 year)
3. NaturNes as an organic food is richer in vitamins, minerals, and
fibre and retains the level of nutrients for much longer 4.
Delicious flavor 5. Products are up to the standards 6. Prestigious
image 7. Advanced technologies of food preparation 8. Innovative
environmental friendly packaging 9. Strong communication with the
customer (Magazines for parents, medical magazines, posters,
Internet, sales promotion, POP) 10. Intensive distribution
(products are within the customers reach) Weaknesses: 1. Product
cycle is short 2. High costs of distribution and promotion 3.
Limits of product development 4. People are not conscious about
organic food. 5. Price is higher than the price of the main
competitor Bledina Opportunities: 1. Organic products which are
really popular nowadays 2. Production and distribution of new
products 3. The greater demand for baby food as a result of the
population growth Threats: 1. New competitors brands on the baby
food market 2. New competitors products
3. New needs of the customers 4. Global crisis
V.
Product policy analysis
A.
Levels of product
The core benefit of the product is the meals for babies for the
age of 4 month to 18 month. Actual Product: The actual product
however contains 40 different recipes from fruits to vegetables to
real meals with meat, fish or potatoes in it. The product is
available in 2 or 4 jar packages. Nestl launched the product under
the brand NaturNes but still with Nestl family brand. This was
necessary because the product is based on natural ingredients and
special cooking procedures to keep the special taste and texture of
aliments. Consequently Nestl launched a high quality product, to
attack their greatest competitor Danone. Therefore this product is
organic and nature, which allows to attract especially parents who
care about biological products, the environment and also the
sustainable processing. (Style Packaging Brand name Quality
level)
Augmented product: Nestl has launched a baby webpage and a
special natures webpage. On this sites mothers can exchange or
gather information about baby nutrition, and also get information
on all the Nestl baby products, with all the different ingredients,
preparation and use occasions.
B.
Analysis of the brand
Physical Fact - natural colored, textured and tasty baby food -
reclosable plastic container
Personality - a young feminine person, - caring about health,
nutrition and environment
Relationship - trustful, ecologic sustainable for environment
and baby
Culture - western, new hype of ecological importance regarding
the product and the producing company
Reflected consumer - caring parent, who care about organic food
for their children - want healthy baby nutrition
Consumer metallization - cares about environment, but no
alternative late 68 - does likely to spend money on value
C.
Analysis of the packaging
1. First level of the packaging NaturNes Baby food comes in
little plastic jars which contain from 130g to 200g biological baby
food. Every jar has a lid so that it is reclose able. Therefore it
is easy to use and practically.
2. The second level of the packaging The little containers come
in 2 or 4 paper wrapped packages
The packaging in general involves ecological bright colors like
white and light green, which represents the nature in the jars.
Additionally there is the big logo placed right in the middle of
the lower edge. Furthermore on the right upper corner, there is
always a little teddy bear sign with the data for which age the
meal is appropriate. The fruits, vegetables or other ingredients
are shown as very natural and very appetizing. On the top of the
packaging the consumer can find important information about the
product. This means that Nestl describes the cooking procedure and
stresses out that all the ingredients are a hundred percent
natural, and with no preservatives, dyestuffs and gluten. The
backside of the carton shows further information about the
nutrition regarding energy of the product and again the information
that the product does not any additional sugar. Part of the
augmented product is the little where it sais how to contact Nestl
bb or internet web page. There also is a hint to the Nestl baby
webpage. the contain sign via phone
Packaging: Materials, Graphics, Colors, Letters and Text, Size
and Variety. The global message of the packaging is coherent.
The logo The logo consists basically of the letters of the
NaturNes writing in blue. The writing in general is a little bit
brandish, so that it is more kids related. On the left side there
is a figurative icon in shape of a flower, this emphasizes the
natural background of the product. The Nestl manufacture brand is
in the middle of the container. The whole logo is coherent with the
organic baby jar food that it stands for. In our opinion, the logo
is not really a logo but it is more a writing, which basically is
not bad but as sign of recognition a little bit too big. But if the
brand is getting stronger in the future
than it is possible the little flower on the left edge of the
brand name is symbol enough to suggest the consumer what the
product is about.
D.
Products market share
E.
Direct and indirect competition
Nestls biggest competitor is Bledina from Danone. This is a low
price product which is available in every supermarkets. Danone
provides with is assortment a full baby meal service. Like Nestl
they have a stage system so that food is special proceeded for
different ages of the baby. On the other hand there are many trade
brands, such as Carrefour, which is a brand even cheaper than
NaturNes. Furthermore, NaturNes has not only competitors outside of
Nestls company. There are also different brands that belong to
Nestl like Moi tout seul, Ma recette or Ptit souper/ Ptit Du. But
all those other brands have not such a complete range of products
and are not that special as NaturNes. VI. Pricing policy
analysis
A.
Pricing objective and pricing policy
The general pricing objective for the company is to create a
value which will be acceptable by the customers. The price is an
important step in the marketing mix for NaturNes because it
reflects the intrinsic value of the product. A wrong pricing is a
barrier for the consumers. In fact, if it is too expensive,
consumers will not buy it. If the price is low, customers will
perceived NaturNes as a bad quality product or they will buy it,
but the company will not have enough profit to resist on the
market. The pricing decision, is the most difficult decision. It is
the reason why before setting prices, Nestl had to do some research
on customers values and on the existing products available on the 4
to 6 months baby food market.
B.
Value of NaturNes (4 to 6 months)
From the customers point of view, the value of the product is
the difference between benefits which are gained and the costs
which are born. The main benefits of NaturNes for customer:
Prestigious image of Nestl: Nestl, through its experience emits a
prestigious image of the Brand. By buying Nestls products,
consumers think directly that products are made with a really good
and high quality.
Quality: Consumers are reading the ingredient labels of their
food and beverage products more closely than ever. People care for
their health and even more when it is about their childs health. It
is the reason why the products NaturNes are made with fresh fruits
and vegetables, 100% natural, with no sugar or salt added. Also it
helps not to overload the organism. The recipes have been created
by experts in order to meet the highest nutritional standards and
to ensure that the food tastes great. A novel steam cooking
technology was developed by Nestl to preserve these qualities. For
Nestl it is important to have a balanced diet. Choice: Nestl
proposes a wide range of products. In fact, the product NaturNes is
present with different types of flavor. (from Artichoke, Peas,
Courgettes, Beans and peas, Carrot and pea, Carrot and pumpkin,
Vegetables, pasta and wheat, Vegetables and wheat.)
Practical of the container: Personal benefits. The lid allows
consumers to keep the food fresh and to keep it longer in the
fridge. It is also a gain of time, consumers will not have to
transpose the food in a container. Also, consumers will not have to
clean as they can throw it directly in the garbage.
Environmental improvements: Packaging is made in plastic bowls
with replaceable lids. The plastic bowl packaging is more
environmentally friendly than glass food containers as it requires
less energy to manufacture. (Marketing, 29th of October 2008) Also,
the packaging reduces the energy consumption and the emission of
greenhouse gases. By buying NaturNes, customers will feel ease to
have done something in favor of the environment. The environmental
friendly is a behavior which is more and more in expansion, so it
is a good strategy for Nestl to get this market.
Gain of time: Parents do not need to cook. They just have to
warm it up and it is ready for baby. It is a market in expansion
because more and more women are working and
they do not have time to cook for their child. They prefer
gaining their time buy buying those products.
Customer service : The company is willing to answer all the
questions which the customers have. They build the strong relation
between the company and the customer.
C.
The different costs of NaturNes for customers
There are two types of cost for NaturNes: the time costs and the
monetary costs. Time costs: In the twentieth century time is an
important value for the people, so high availability of the product
is a necessity. NaturNes has a high penetration, the product is
available everywhere. If customers want to buy the product they
could go to the nearest supermarket to find it. They do not have to
spend time to search for it. Monetary costs: NaturNes is a product
which is middle ranged. That means that almost everybody can afford
it. The only thing that consumers have to do, is to chose the
flavor and the brand because there is not so much difference
between other brands (The packaging plays in important role for the
choice of the product).
D.
Range of pricing in the retailing stores.
To understand the pricing difference between the retailers, we
have examined the prices of NaturNes Carrot (4-6 Months) for
offline distributors (Intermarch dAbroumont, Carrefour Quetiny,
March Plus Bannelier) and one online distributor
(www.paradisdesprix.com). Here are the results:Intermarch
Paradisdesprix.co m NaturNes Carrot 1,30 1,44 Carrefour Quetigny
1,45 March plus 1,45
The price of NaturNes carrot (4-6 months) varies according to
the place: from 1,30 to 1,45. The lowest price is in Intermarch and
the more expensive one is in March plus. But in fact we can say
that prices in all the retailer stores (Intermarch is an exception)
are the same, because Nestl wants NaturNes to be available
everywhere. Consumers do not have to go to mall out of the city for
buy NaturNes. When we think that their customer are working
mothers, this strategy is the best option for NaturNes.
E.
Range of competitors prices.
The NaturNes flavor carrot is the most expensive product among
companies which produce baby food. We have compared NaturNes carrot
products with other well known brands whose products are quite
similar to ours. Here are the results:BRAND MAIN INGREDIENTS Bio
Babybio NaturNes Carrots Carrots 2*130g 2 x 130 g 2 x 130 g 2 x 125
g 2 x 130 g 2 1,45 1,35 1,30 1,20 WEIGHT PRICE THE DIFFERNCE
BETWEEN PRICES (%) + 37,9% -6,9% -10,3% -17,2%
Carrefour Carrots & potatoes Hipp Bldina Carrots &
potatoes Carrots
The difference between the two market leaders (Bldina and
NaturNes) is quiet small but it is still in important difference,
especially during the crisis time. In fact, people are more and
more careful than ever for their purchases. Despite the fact that
their products have generally the same ingredients and the same
volume, there is a difference between prices which amounts 0,25. It
means that the price of Nestl NaturNes is higher for about 17,2%.
The main cause of this situation is the fact that Danone is a very
big manufacturer which uses the price as its main marketing tool
while NaturNes is using quality of product. Surprisingly Carrefours
price is lower for only 6,9%. The retailers brands seem to be the
cheapest one, but as we can see that is not a principle. The
difference between NaturNes and Bio Baby Bio can be explained that
all the products buy by Bio company are really expensive and the
company needs to sell at higher prices if they want to get a
profitable margin.
F.
Competitors policiesBldina is the market leader on baby food.
Consumers associate the brand with its history. Because of its
financial strength, Bldina can provide the product with the lowest
price.
Carrefour and Leclerc are retailers brands. They are outsourcing
the production of their products. Because of their lowest costs,
they can provide the product with low prices.
Hipp, the German manufacturer is using pricing policy which is
oriented to find a balance between quality and price. This is the
reason why they have a middle range pricing policy.
Babynat is subject to the very strict specifications of child
regulations. They select the best products from the South West of
France. Very good quality but very expensive. Respect the
environment and the rights of the humans being.
G. The different factors formation for NaturNes1. Internal
factors
which
influence
price
Marketing objective Nestl would like to become the leader on the
baby food market. In order to achieve this goal, the company
created the line of products which are made for each age group of
babies; wide range of products and flavours is the first step to
gain new clients; the additional advantage is the price which is
lower than the other organic products.
Marketing Mix strategy Product NaturNes has a wide range of
products; it offers forty different dishes for children from for
month to one year. Price the prices are set on the middle level and
are lower than the other organic products. Promotion it uses such
marketing tools as: sales promotion, ads in magazines for parents
and in the internet. Place the products are available mainly in the
supermarkets e.g. Carrefour, Intermarch. 2. External factors
Demand elasticity
The demand for NaturNes products is sensitive. In fact, it can
be explained by the fact that NaturNes products are common to the
products of the competitors, with a similar price. Moreover, the
quality is not so different from the quality of the competitors.
NaturNes brand is well known, but it does not have an exclusive
image. It is perceived as an ordinary product by customers. Baby
food market profitability encourages new companies to invest in
this sector. It means that NaturNes do not have the monopole to
produce such products as baby food is available in every single
supermarket and in spite of introducing many innovations, each
product has its substitutes. NaturNes has a middle range price.
This is not a very good way to attract customers. Industry
structure
In 2007, Nestl had 33% of the market share. It means that it is
not a leader on the market, but it is still a significant player
among baby food producers. The brand is well known and the sales
are high, thanks to that the company can set higher prices than its
competitors.
H. Estimation of price elasticity from target markets buying
intentions (in )According to the survey which was conducted on 53
customers principally people with children the price of Nestl
NaturNes Carrotes is quite elastic. The respondents were asked to
decide how much they would be able to pay for such product (a
maximum and also a minimum price were required). Our research shows
that the actual price is set on the right level, because 100% of
the customers is willing to buy it. We proved also that the price
is quite elastic. The increase of the price from 2 to 3 would cause
the drop of demand for about 50%.
100% of potential customers would by the product if prices were
between 2 and 2,50. 70% would buy it if it was 3 maximum. of
them
50% of them would buy it for 3,5 maximum. VII. Distribution
policy analysis
A.
Suppliers
Today executives have come to realize their customers'
satisfaction - or dissatisfaction - was linked to the performance
of their supply chain. supply chain management (SCM) is "both a
source of competitive advantage and a lever for profit margin.
Nestle defines SCM as the two-way management of the flow of goods,
services and information from suppliers to manufacturers,
wholesalers, distributors, stores -- to the end user. SCM is
especially critical for the food industry because of the ease of
spoilage. Seen that way, SCM becomes a branding issue. When Nestle
places its logo on a product, the logo represents "a seal of
quality." Protecting that quality makes Nestle responsible for its
entire supply chain. Nestle cooperates with around 165 000
suppliers who are willing to apply Nestles quality standards. In
2008, the company purchased 14.9 billion euros of raw materials.
The company created its Supplier Code which specifies the
principles of mutual cooperation between Nestle and suppliers. By
acceptance of the Code, the supplier commits that all existing and
future agreements and business relationships with Nestl will be
based on the rules which there are included. To strengthen the
supplier chain, Nestle supports operating practices and farming
practices. It demands from the suppliers to strive towards
improving the efficiency of their operations.
B.
Channel levels and intermediaries
Nestle uses the system of indirect marketing channel (2-level
channel). This kind of system is typical for most of the food
producers. It contains two intermediaries: wholesaler and retailer.
Wholesaler is responsible for distributing Nestle NaturNes to the
retailers mainly supermarkets. Retailer has a direct contact with
the customer who is the last part of our channel.
C.
Types of retailers: off and online
The Natunes products are sold by off as well as online
retailers. The biggest offline retailers are Intermarche,
Carrefour, Merche Plus, Auchan. There is also a possibility to buy
Natunes by the Internet. We can find the products in the online
shops like: paradisdesprix.com ooshop.com chronodrive.com
auchandirect.fr houra.fr
D.
Exclusive, selective or intensive
Nestl NaturNes products are distributed in an typically
intensive way. This kind of distribution is often used for the
products which are common and for which the demand is high. Baby
food is a kind of product which has to be available when to
customer need it. That is the reason why Nestle Company decided to
sell NaturNes products in as many outlets as possible.
E.
Merchandising
Nestl NaturNes is sold in ordinary supermarkets, therefore there
are many different products which need to get the attention of the
consumers. In Carrefour for example, they had little signs which
stood out of the shelf. With this, they try to catch the view of
consumers and direct them toward the product. Furthermore they had
promotion for getting a discount on the price by buying NaturNes
products. (See the picture below)
All of those actions are very important because the shelf where
the product is located is very overload with products of the
competitor as well as with substitute products from Nestl its
self.
A typical shelf in Carrefour is organized as followed.
Cereals Cookies
Baby milk
In general, the products are organized regarding the age of the
baby. Starting on the right side with baby milk, to baby food for
the youngest (4-6 month), to baby food product for older babies
(18-24 month) and finally to products like cereals, cookies and
firmer products. NaturNes can be found in several places on the
shelf as their product line concerns every age of babies.
VIII. Promotion policy analysis
A.
Selected Media for advertising
Nestl NaturNes mainly targets 25-35 years old young and working
mothers. Most of the targets have to time to prepare meal for their
babies. Also they are concern about health factor of the food.
According to the Medias have the high frequency of target, Nestl
decides to organize the media collection as folowing: Television o
Channel: National broadcast chanels (TF1, M6 etc.) o Timing: Whole
day, specially prime time MAGAZINE o Channel: Mother-Baby
magazines.. o Timing: monthly, weekly INTERNET o Channel: Baby care
websites, portals
B.
Examples of advertising and objectives
There are 4 types of advertising objectives to recognize a
specific task, a specific target, a specific period of time:
Informative, Persuasive, Comparative and Reminder Advertising. For
the commercial in the annex, Nestl NaturNes wants to make a
promotion of a new launched product for babies. This is an
informative advertising to introduce new products to clients and to
build the primary demand. For achieving this objective, commercial
wants to show Nestl NaturNes different cooking style as its most
important difference than the competitors. Also the commercial
defines three most important benefit of Nestl NaturNes as Omega
3-6, Nutrition and Fresh fibers While commercial gives these
messages, consumer can feel natural atmosphere. Also, because of
the nature of the product, the commercial is in the Baby World
concept. At the end of commercial give the title which contains two
main element of product (babyfood and Nature): NaturNes-Nature
Generation3
C.
Types of promotion
Retailler in France are main channels of Nestls distribution
which has a ultimate control of promotion. Thats because promotion
activities of Nestl NaturNes is very limited. Most of the types
that NaturNes uses, are:
3
You can see a TV ads application of Nestl NaturNes at
Appendix
1. the Intermarch example) 2. 3.
Price discount: Offering a special price for a limited period.
(like in
Package selling : Buy the more than 2 jars for cheaper price.
Mass display: Spend the extra fee to display in the key places,
like
the heads of gondolas, K1 and K2.
D.
Types of Public Relations
The global policy of Nestl NaturNes is to get closer with young
mothers. Thats because Nestl invests to a website4 that mothers can
find a lots of information about how they can take care about their
babies, communicate with other mothers, get information about new
trends of baby-care, and read expert articles And also as a
corporate social responsibility strategy Nestl make some projects
that usually mothers concern about with Nestl Foundation France5
which initiates and supports research in human nutrition with
public health relevance in low-income and lower middle-income
countries.
E.
Types of Personal Selling:
Nestl NaturNess sales are mainly concentrated on the markets. As
the brand has been expanding and adding new flavors to its product
range, it also used personal selling like point of purchase
activities in the markets. This is also a kind of push strategy:
Nestl pushed its new product through personal selling.
F.
Push or Pull Strategy:
Push promotional marketing strategy means that its the company
who has to push the product to the consumers; the demand for the
product doesnt come from the consumers.Marketing acc. Marketing g
ities
Producer
Intermediaries
End users
Demand
Push Strategy of NaturNes The strategy that Nestl NaturNes
picked up due to the nature of the baby food market where there are
many competitors of Nestl NaturNes is also a push strategy meaning
that Nestl NaturNes develops advertising and promotional strategies
and tools like wholesale discounts, bonuses etc. towards its
marketing and
4 5
http://www.bebe.nestle.fr/ http://fondation.nestle.fr
distribution channels, shortly towards the intermediaries. As
there are many competitors on the market, Nestl NaturNes can easily
be substituted by another baby food. Its fact that Nestl NaturNes
is a brand which is well recognized by the consumers because of its
quality product. However, in order to be able to benefit from the
brand name and to keep its current position on the market, the push
strategy is designed to have the supermarkets, hypermarkets and
other small size selling points promote Nestl NaturNes to the end
users.
APPENDIX
Appendix 1: The current organization of Nestl.
Appendix 2: The different brands of Nestl.
Beverages Coffee: Nescaf, Nespresso Water: Nestl Pure Life,
Vittel, S.Pellegrino. Other: Nestea, Nesquik, Nescau
Milk products Shelf Stable: Nestl, Nespray, Nesvita,Coffee-mate,
Juicy Juice Chilled Dairy: Nestl, Yoco.
Ice cream
Nestl, Antica Gelateria del Corso, Dreyers/Edys,
Drumstick/Extrme, Maxibon/Tandem, Mega, Mvenpick, Sin Parar/Sem
Parar/Non Stop Prepared dishes and cooking aids Bouillons, soups,
seasonings, pasta, sauces, noodles: Maggi, Buitoni, Thomy, Winiary,
Torchin, Osem, Totole, Haoji Frozen foods (prepared dishes, pizzas,
small meals): Stouffers Refrigeratedproducts (cold meat products,
dough, pasta, pizzas, sauces, snacks): Nestl, Buitoni, Herta, Toll
House Confectionery Nestl, Crunch, Cailler, Galak/Milkybar, Kit
Kat, Smarties,Butterfinger, Aero, Polo Professional products for
foodservices Chef, Davigel, Minors Nutrition Infant: NaturNes,
Nestl, Nan, Beba, Nidina, Nidal, Good Start, Lactogen,Guigoz,
Nestogen, Alfar, Mom&Me, Nestum, CerelacHealthCare: Resource,
Boost, Nutren, Peptamen Performance: PowerBar, Musashi Weight
Management: Jenny Craig PetCare Purina, Friskies, Fancy Feast,
Alpo, Gourmet, Mon Petit, Felix, Dog Chow, Cat Chow, Pro Plan,
Purina ONE, Beneful, Tidy Cats, Purina Veterinary Diets
Appendix 3: An example of a TV ads of NaturNes
Opening A baby is searching something
A normal baby food, everything is cooking at the same time
but our wise pot does not happy of this
However For Nestl NatureNes
Every ingredient separately
is
prepared
And three benefits ; Omega 3-6 Nutrition Fresh fibers
Are inside NatureNes
Pack Shot Nestl NaturNes Nature Generation