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Roles of Technology in Developing Advertising Strategies for Nestls

Submitted to Mr. Mahmud Zubayer Assistant Professor Department of Business Administration East West University

Submitted by Name Ayaz Arman Fatema Tuj Johora Md Hamidur Rahman Nurul Arshad ID 2009-3-10-073 2009-2-13-036 2009-2-14-031 2009-3-10-074 Sec 05 05 05 05

Date- 18/04/2011 Subject- MIS101

Table of Content

Title

Page no.

Introduction SWOT Analysis Perceptions Future Growth

Recommendations

Conclusion

Introduction
Nestl is one of the largest food and nutrition companies in the world, founded and headquartered in Vevey, Switzerland. Nestl originated in a 1905 merger of the AngloSwiss Milk Company, which was established in 1866 by brothers George Page and Charles Page, and the Farine Lacte Henri Nestl Company, which was founded in 1866 by Henri Nestl. The company grew significantly during the First World War and following the Second World War, eventually expanding its offerings beyond its early condensed milk and infant formula products. Today, the company operates in 86 countries around the world and employs nearly 283,000 people.

Methodology
Both primary and secondary data have been used.

SWOT Analysis on Nestle Technology

Nestle headquarters in Switzerland, was founded by Henri Nestle in 1866. It is renowned as the worlds leading nutrition and health based company. Nestle grows is product line through innovation as well as renovation and maintains a balance on its geo-environmental activities and product lines. They opt for long term performance rather than short term goals. The Company prioritizes in bringing the most relevant products to the consumers according to their needs that will prove valuable throughout their life.

Strengths:
Globally recognized as one of the largest and powerful food producers, covering almost every country (factories and plants). Employs approximately 283,000 people globally. Powerful brand positioning in the consumers mind. It has a vastly diversified product portfolio containing approximately 6000 brands (beverages, ice creams, frozen food items, chocolates and biscuits, pet care nutrition items, etc.) It has established joint ventures with giants like Coca Cola, General Mills and LOreal that are helpful in providing knowledge on different technological aspects. Consistently ranked as largest bottled water corporation that operates in an environmental friendly manner. Top 50 list of Fortunes Americas Most Admired Food Companies, and ranked on top on Consumer Food Products. Strong internal growth and emphasis on innovation internally. Strong cultural environment, that acts as a loyalty carrier for the employees. Nestle has taken a visionary step as being one of the many companies that represent and encourage globalization that has also become an identity for its logo. Quality is a vital element regarding nestle products. Largest consumer products organization that operates globally. It also sells professional brands to different customers such as colleges, hotels, restaurants etc.

5 Powerful marketer, and never seizes any opportunity to embed the brand image in the mind of the consumer. The quality of the Nestle products embeds an element of trust in the mind of the consumer that makes Nestle one of the powerful brands to be followed. Produces low cost products that give them an edge to their competitors. It also has low operating costs. Globally, biggest ice-cream producer, having a market share of approximately 17.5% (2006). The name Nestle also visualizes the high standard and quality of the product. Customer base loyalty for Nestle is very vast and powerful. The decentralized culture in the organization encourages employees. It has a dynamic and innovative approach when it comes to new trends regarding the technology.

Weaknesses:
Hovering over the stats of 2008, the food industry grew 8.9% but Nestle lacked the potential to raise their sales in the organic food division that lay flat. Regulators like FDA and AMA (American Medical Association) are pressing on the firm for removing tags that hold no ground such as low cholesterol or heart healthy. Parents have also reported diabetic epidemic due to the consumption of such goods, in children especially. Promoting infant milk products comparing to breastfeeding. Slaves in African countries that are working under it. It holds up a negative effect regarding the whole brand. Retailers do not get to set high margins to indulge more in sales. Logistics cost is quite high. Many products are not understandable in different countries. It did not make much of an impact in France with their LC-1 (food commodity). Coordination between country specific plants with the Center, due to which some plants are running exceptionally smooth while operations in other countries lack effectiveness. Transportation as well as storage (proper warehousing) problems. Supply Chain having a complex stature (India plant transitional traceability).

6 The immense diversification portfolio of the firm makes it impossible to run every division smoothly. Russia being an unstable market for Nestle which cuts a big chunk from Nestls bite. It is also perceived that Nestle puts profit first.

Opportunities:
Due to the high intensity of the health conscious awareness in the society, more health based products are required especially with incompromisable quality. Can go into the anti-allergy products that are very common, such as peanut free or gluten free products. They can also invest in snacks that would further diversify its product portfolio. Provide incentives to the retailers to increase sales volume. Open cafes that would exclusively provide Nestle products. LC-1 having the opportunity of having a greater impact in Germany (2 years had them go for 60% of the market share), and being the established market leader, they can establish more brands in the market. Middle class share in most of the economies are growing much larger. Nestle India may hold the position of being the export hub due to the low cost of labor comparatively to developed countries. In Asian countries like India, Pakistan, Bangladesh; consumers are mostly price conscious rather than health conscious. Nestle has an opportunity to have extensive strategies implemented to gain the market in such countries. Developing countries have a higher rate of GDP than those of developing countries, Nestle should enter in such markets as well. Recession has created such an impact that the market is struggling and has almost got out of that recession that will surely increase the cycle of cash flow which will be profitable for Nestle to cash in on such a time.

Threats:
Contamination of products should be regarded strictly (Cookie Dough, March 2009). The company has a not so pretty history with the FDA. Pet Food contamination 2007 (imported from China, the vegetables contained rat poison). Inflation rise is giving birth to high prices. Raw chocolate prices are jumping, along with the Dairy costs; which leaves heavy cuts in the margin in order to make the customers brand loyal. They have also shrink the packaging which is not really noticeable, so the customers are paying the same amount for a lesser product. Competitors like Cadbury Schweppes, Hersheys, Quaker, Heinz, Del Monte, Kelloggs, and Kraft Foods are also well established. Its a tough market with a tougher competition for gaining market share. Market is quite mature and the competitors specialize in a certain product that can hit hard on Nestle. (Yogurt Market US: General Mills) In the Indian market, fresh food is preferred than ready-to-eat meals. In still developing countries as well as underdeveloped countries, Nestle will face a large competition in market both domestic and unorganized sectors. Poverty sector in developing countries is also a lacking that must be watched over for. Malnutrition and obesity are yet another burden faced by the developing countries.

Strengths, weakness, opportunities &threats(SWOT)

Location of factor

Type of factor
Favorable unfavorable

Internal

Strengths:
Ability to leverage strong brand name to generate sales. Ability to customize products to local market conditions. Strong global operation with diversified revenue base. Research& development capabilities.

Weakness:
Increasing instances of product recalls hampering brand equity.

External

Opportunities :
Transition to nutrition &well being company. Focus on developing emerging economics. Booming out of home eating market.

Threats:
Compliance issue resulting in penalty payments. Macro economic factors. Allegations of unethical business activities.

Future growth of Nestles advert technology

Information Sharing System- A common database can be established that will be accessed by all users. Customers will be able to express their thoughts and see what others feel about Nestles products. It will play a vital role in developing a strong relationship between Nestles and its continuing customers by building a interactive community of customers. However, secqurity should be a concern as this database will also be accessed by Nestles competetors who may use this platform to spread rumors or negative publicity. Brand networking- is the engagement of a social networking service around a brand by providing consumers with a platform of relevant content, elements of participation, and a currency, score, or ranking. Brands are using brand networking to create communities that serve as a fully encompassing interactive destination to incentivize brand participation online and off. This evolved level of user participation with the brand creates strong relationships with consumers and leverages sales and generates fan equity. Niche blogging- is the act of creating a blog with the intent of using it to market to a particular niche market. While it could be argued that all blogs are, in some form, a niche blog, the term as it applies to marketing refers to a particular kind of blog. Neither blogging nor niche marketing is a new concept. However, only in recent years has the concept of a niche blog come into being. Usually, niche blogs will contain advertisements of some sort (pay-per-click or products or both). In some cases, the purpose of the niche blog is to incite the reader into visiting another website which may then attempt to sell the reader a product or service. Online advertising- is a form of promotion that uses the Internet and World Wide Web for the expressed purpose of delivering marketing messages to attract customers. Examples of online advertising include contextual ads on search engine results pages, banner ads, Rich Media Ads, Social network advertising, industrial ads, online classified advertising, advertising networks and e-mail marketing including e-mail spam Bluetooth Advertising- is a method of Mobile marketing that utilizes Bluetooth technology to deliver content such as message, information or advertisement to mobile devices such as Cellular phone or Tablet computer. Bluetooth Advertising can also be received via laptop or PDA.Bluetooth Advertising is permission based advertising, which means that when a mobile device has received a Bluetooth message, the recipient has the choice to either accept or decline the message. The recipient needs to positively indicate that they wish to receive marketing messages.

10 The Semantic Web- is a "web of data" that enables machines to understand the semantics, or meaning, of information on the World Wide Web, It extends the network of hyperlinked human-readable eb pages by inserting machine-readable metadata about pages and how they are related to each other, which greatly increases the ease of automated data gathering and analysis. The term was coined by Tim Berners-Lee the inventor of the World Wide Web and director of the World Wide Web Consortium, which oversees the development of proposed Semantic Web standards. He defines the Semantic Web as "a web of data that can be processed directly and indirectly by machines

An editorial calendar is used by bloggers, publishers, businesses, and groups to control publication of content across different media, for example, newspaper, magazine, blog, email newsletters, and social media outlets like Twitter and Facebook fan pages. They are an extremely efficient way to control publication of content across diverse media outlets over time. SiteScreen filters out objectionable placements for brands in the network, in channels and also within individual websites. As an intelligent, language-based filtering system, SiteScreen enables advertisers to exclude advertising contexts with which they do not wish their campaign to be associated. For this advertisers can choose various content themes or categories, like Adult content & Nudity or Accidents & Disasters. Virtual advertisements can be effectively integrated into live television. For example, Fox Sports Net places a virtual advertisement on the glass behind the goaltender that can only be seen on television. Contextual advertising is a form of targeted advertising for advertisements appearing on websites or other media, such as content displayed in mobile browsers. The advertisements themselves are selected and served by automated systems based on the content displayed to the user.

RECOMMENDATIONS :

11 We have no doubts that NESTLE is the worlds most popular food processing brand. It has been taken many strategies so far. Here we tell about some recommendations on our study. STRATEGIES : NESTLE actually use the MIS for their business. And they use strictly technology in developing advertising strategies. They actually use online forms as well as networking most. FORMS OF ADVERTISING : There are so many advertising forms for NESTLE. They are Ambient Intelligence,Brand Networking,niche Blogging,Online Advertising,Bluetooth Advertising,Semantic web,Editorial Calender, Contextual Advertising Etc. SPREADING OF USE TECHNOLOGY : NESTLE wants to spreading of use technology. They should take some steps for that. If technology spreading than company can take more advantage from advertising day by day. USING SOCIAL MEDIA : The one of most aggressive advertising strategies is using social Media works just like Networking.NESTLE can use Social Networking as well. Sometimes media Social works as Mass Media. Word Of Mouth is another forms of social media.So company should using and spreading social media. ONLINE ADVERTISING: This is the most effective form of developing advertising strategies. Online Advertisingis a form of promotion that uses the Internet and World Wide Webfor the expressed purpose of developing marketing message to attract customers. SICURITY : Security is one of major things to think.More we using technology we have to provide more Security. Efficient Security system can provide continuous using of technology and can protect data. LIMITATIONS : There are so many limitations for roles of technology in developing advertising strategies in bangladesh.As we know that Bangladesh is a developing country so it has some technological limitations.So NESTLE sometimes can not using the better technology for advertisement.As well as NESTLE facing some Governmental rules problem.Sometimes technological advertisement can not create any resulat for company because Bangladeshi people are not used to with technology yet.

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References:
http://www.nestle.com/AllAbout/AtGlance/Introduction/Introduction.htm http://money.cnn.com/magazines/fortune/mostadmired/full_list/ http://www.allbusiness.com/trade-development/economic-development/.html http://www.equalizerpost.com/nestles-swot-analysis.html http://articles.castelarhost.com/nestle_background.htm http://www.docstoc.com/docs/Nestle-Marketing-Mix http://www.coursework.info/University/Business_and_Administrative_studies/Marketing/ Nestle_is_the_world_biggest_known_brand.html http://www.scribd.com/doc/Swot-n-Pest-Analysis-of-Nestle-and-Coca-Cola http://free-pdf-ebook.com//nestle-and-coca-cola-a-swot-analysis/