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Students name: Nguyen Hoang Loc Anderson Class: SUD 10 Subjective: Marketing Identify and explain the macro

ro and micro environmental factors in your country which might influence the companys marketing decisions: The market environment comprises all aspects of a market which affect the companys relationship with its customers and the patterns of competition. It not only has a major effect on the operation of a business but also the business can control and change it. The micro includes suppliers, distributors, customers, competitors, employees, intermediaries and interest groups have all identified as key elements of the market environment. The Micro Environment

Suppliers

Customers

Distributors

Nestl
Intermediaries Competitors

Interest groups

Employees

First, suppliers who can provide to the company with the materials and services which they need to achieve their business activities. There are many directly influences on the company form a suppliers behavior. Therefore, having a good relationship with suppliers is very important, this will lead Nestl to remain competitive and secure quality products. Moreover, the company can receives a good price which is a decrease in raw material prices will affect the firms marketing mix strategy and may even force low price. However, Nestl needs to identify who to use to supply them, on the responsibility it takes for these suppliers and on the terms and conditions it adopts. They should research can the suppliers provide high quality products at a good price. Moreover, identifying the suppliers got the flexibility to respond to a companys demands. The reason for this research that Nestl can control and change the materials and services from their
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suppliers. The main suppliers are Lm ng, Dak Lak, Dak Nng v Gia Lai which are the main area that produce the most caf in Vietnam. Nestle has supported farmers in Di Linh district and Lam Dong Province in the successful implementation of certified sustainable coffee production standards 4C for 175 farmers and two coffee purchasing agent under Nestle Vietnam. Second, customers are the most important for the company to carry out their business activities. Without customers, without business. Therefore, the company should provide the best goods and services which can meet customer needs and wants with the purpose of receive the satisfaction of customer. For Nestl, customers are obviously the key to sales. They must monitor customer needs and attempt to anticipate how these will develop so that they can meet these requirements effectively now and in the future. To understand their customers, the company needs attempting to provide more information on customers by using V.I.P cards, mail list, promotion, recommendations to online in order to offering them appropriate deals, building a good relationship with customers and ensuring they come back time and time again. This helps Nestl easy to improve the products and develop the strategies to get more profits. Most of products of Nestle focus on children who would like to use chocolate flavor. However, the main customers that Nestle wants to attract are parents, who want the best products for their child, of these children. So the company is providing more and more nutrition into its products. For example, Chuckie also builds up child's bones and makes them strong as it contains Calcium, Vitamin D, Phosphorous and Magnesium. And to keep children alert and full of energy the whole day. Chuckie gives out energy-releasing nutrients such as Protein, Carbohydrates, Fat, Thiamine, Riboflavin, Niacin, Vitamin B6 and Vitamin B12. Distributors play a vital role in the deliver products to customers. Distributors are the intermediaries between the manufacturer and the consumer. Furthermore, they are marketing companies and participate in the marketing process. Distributors are important channels since large manufacturing brands do not wish to distribute all the way to the final consumer The distributors used will determine the final price of the product and how it is presented to the end customer. When the retailer has control over where the products are displayed, how they are priced and how much they are promoted in-store. Nestle has many wholesalers and retailers in Vietnam and presences in many markets of Vietnam. They need to create a good relationship with supermarkets such as Big C or Metrol, with retailers such as groceries or canteens, with distributors. These are the main suppliers who will help them achieved by good negotiating skills and offering appropriate incentives or using changing distribution channels. Furthermore, they help company to promote, sell and distribute its products to final customer. Competitors: Every company faces a wide range of competitors. A company must secure a strategic advantage over competitors by positioning their offerings to be successful in the marketplace. Competitors influence on the firms actions. If a competitor launches a
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new product for example, they will review their own marketing plan. Competitors, whom are part of their microenvironment and compete for firms customers, might try to take their best employees and might distribute through the same channels as company. Therefore, Nestl needs to establish exactly who their competitors are and the benefits they are offering to the market. For instance, Nestl offer benefits that are better than those offered by competitors or they have a unique selling point .With the intention of to maintain or improve its position within the market and the company will have a greater opportunity to compete effectively. The Nestles competitors come in the form of a list of various competing names and well as presenting a few different types of competitors such as Vinamilk, Dutch Lady, Vina soy or Abbott. However, the main competitor of Nestle is Unilever which is organization provide many types of foods and drink beverage. Employees are those people that are employed to work for the company. They are an important because they drive value through customer satisfaction and embody the marketing concept. If the company has many high-quality employees, they can develop the organization with the appropriate strategy. Furthermore, they are the vital interface between a brand and its customers. With good employees who will know how to meet the satisfaction of customers and provide what customer needs and wants. For this reason, Nestl needs employing the correct staff and keeping staff motivated which is an essential part of companys strategic planning process. Training and development play a critical role in achieving a competitive edge; especially in service sector marketing. Moreover, employees need to be recruited and trained, motivated and developed, all of which would support the functions and philosophy of marketing. In fact, Nestl in Vietnam currently operates 4 factories and employs over 1,500 employees nationwide and approximately 250,000 employees in the world. They have a staff rich in experience with high skill levels and over 150 professors who research the food nutrition. Furthermore, Nestle always provides training classes for the new employees in order to develop their skills. Interest groups are individuals or businesses that provide the capital for the company. They include customers, employees, the community, shareholders, suppliers and lenders. Therefore, Nestl needs to create a good relationship with interest groups that mean they need to be managed carefully as rapid short term increases in profit could detrimentally affect the long term success of the business. Moreover, they will easy to create a center of attention investment from the interest groups in order to expand the capital. They also can decrease the interest if they have a long relationship with interest group. For example, Nestle should provide more holidays or bonuses or reasonable salary for employees to make them feel comfortable and encourage them do better or they should set out some policies for shareholders to make them invest more money for the company or when they have a good relationship with suppliers or lenders who will help the company decrease the interest or reduce the cost of raw material.
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The Macro Environment The macro environment can be described in terms of six key components: Political environment: o Government stability: Vietnam is the most peaceful country, which is without war and terrorism, in the world. Vietnam had ranked 35th in the table of Global Peace Index which been evaluated by the Economist Intelligence Unit in total 121 countries. Therefore, Vietnam attracts many investors and foreigners; this will lead the economy of Vietnam increase and bring many benefits to companies, especially, Nestl. For example, when the economy of Vietnam increase that means the GDP also increase goes ahead increase the consumption of Nestl. Moreover, the government also provides many policies which support to Nestl easy for running on their business. o Foreign trade regulations : Nestl is the foreign company so when they import or export the raw material, they need to pay the tax for importing or exporting which depend on the material that the company import or export. Furthermore, they must to pay VAT tax which will take 20% amount of money which is the profit of company for each product. Nestle also needs to pay the corporate income tax which will take 14% amount of the revenue of company per month. Economic Environment: o GDP trends: In the research, Vietnams GDP met $1,300 for one person per year in 2010 and increase 6.8% and will continue increasing in the future(following Wikipedia). If the GDP increases, the income of each person will go up. That means, people can earn more money so they can have money to buy Nestl. This makes the profit and consumption of company also will be increased.

o Inflation: Inflation rate is the important factor. Nowadays, the value of money is decreasing so it leads to the cost of raw material, cost of manufacturing, cost of sales will be increase. This makes the cost of Nestls products will be more and more expensive. This will effect on consumption and customers of Nestl and the profits of company will also be decreased.
45.00% 40.00% 35.00% 30.00% 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% 1992-5.00% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Cc nc pht trin Cc nc ang pht trin chu

Cc nc mi ni v ang pht trin Vit Nam

Note: Red is Vietnam o Unemployment : Currently, companies are operating during the global economic crisis and some companies have gone to bankruptcy. It makes the rate of unemployment will be increased. That means people cannot earn money so their financial is going to narrow and this leads people do not have money spend for Nestls products. The unemployment rate in Vietnam reach at 4.65% in 2010, increase 0.01% with 2007. o Interest rate: This is very important to the survival of Nestl. They need a large number of capitals so they must borrow the money from the bank or government for running on their business. If the interest rate is low, they can pay the interest from the loan. However, if the interest rate is high, it will effect on the profit of Nestl, they must spend amount of money for paying the interest. It makes the company easy to bankruptcy. In fact, for conventional loans, interest rates must not exceed 17.0% / year. For some priority subjects, the interest rate does not exceed 15.0% -16.0% / year. For flood recovery loan, the maximum interest rate of 15.0% / year. For loans subject to interest rate agreements: securities lending business, consumer loans: short-term interest rate: about
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18.5% / year, medium and long term loans: about 19.0% year (down 0.5% / year) (floating-rate application, the principle of interest rates 12 months plus (+) at least 4.0% / year. o Exchange rate: Nestl is the foreign company so they need to import the raw material from other countries. If the value of Vietnams currency has the lower than other countries currency, when Nestl import the raw material they will spend more money for this. It makes the cost of products be increased, be more expensive so the consumption will be decreased. In fact, Association members Vietnam Bank has also achieved consensus on the level of interest rates not exceeding 14% / per year in 2012. Exchange Vietnam/USD from 11/2009 to 12/2010

Social Cultural Environment: o Population demographic: Population in Vietnam is the one of fifteen countries has the highest population in around the world. In fact, Vietnam ranked 13th in the world with a total population of over 90 million people. (According to Wikipedia) . It means the demand of customers is high, this leads the consumption also is high so Nestl can attract more customers and improve the profit. Moreover, Vietnam's population is mostly young population who would like to use high quality products and attracted which Nestl can provide for them. Furthermore, the population in Vietnam is young population which the average age is under 30 and this group represents a large share of the population. o Income distribution: Vietnam is a developing country; therefore, the GDP of people is low. It just has 1300 USD per year in 2011 .However; Nestl provides the products which
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focus on the middle and upon class. Consequently, the range of demand will be decreased. o Class and social mobility: Nestl has focused on the people who have income belong to milled and upper groups. In Vietnam, these people always want to buy high-quality products not only for them but also for their children. o Life changes: Vietnam is one of the countries which are most import chocolate in the world and Vietnam is the second country which is most export caf in around the world. It means the flavor and consumption of customer in Vietnam is chocolate which is providing more and more in Nestls products. Furthermore, the habit of Vietnamese is chocolate; they prefer using chocolate than other flavors. Technological Environment: o Speed of technology: Internet is a good example for this case. Nowadays, internet is everywhere and people can use it every time that they want. Therefore, Nestl should to use internet in order to promotion and commercial for its products. It is the most powerful way which helps customers knows more about Nestl. However, in Vietnam, Nestle must to follow the law of promotion such as they cannot provide wrong information of products for customers. Furthermore, when promote on the internet or TV they must pay a lot of money for advertisement. o Packaging: It is also the way to promotion and advertisement Nestls products. It will provide more information about the nutrition and image of the company. However, they need to follow the measurement standard product packaging such as the requirements for limited space can be loosened to 60% when packed with ingredients in 300ml and 50ml or between 30g and 50g. Environment factors: o Weather: Vietnam is a country of the tropical regions so the weather always is hot, especially, in the summer. In this season, people usually lose energy and feel thirsty so they need a product which can provide energy and water for them. Nestl provide consumers with the best tasting, most nutritious choices in a wide range of food and beverage categories and eating occasions, from morning to night. o Waste disposal: This is the most important thing that Nestl need to operation in Vietnam. Because the government requirements that any company, which wants to operation in Vietnam, must have waste disposal systems in order to reduce the
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pollution. They need to use reasonable, saving natural resources, develop clean energy, renewable energy and boosting recycling, reuse and waste reduction. Nestle applies to product lifecycle to attract the participation of all stakeholders, from farm to consumers in order to reduce the environmental impacts of products and activities company's business. Four priority sectors are water, agricultural raw materials, production & distribution products and packaging. They implement this policy through an Environmental Management System of Nestl. Legal factor: o Safety and health: Nestl must product the productions which are safety and health for customers by using modern systems. Moreover, they also need to protect health and safety of employees by buying insurance. Nestle also provides the product without melamine, which is effect on the health of customers, and follow strict standards for milk production. They need follow the rule of food safety such as the preservative concentration shall not exceed the permitted standards. Marketing segmentation: A market segment will only be valid if it is worth designing and developing a unique marketing mix for that specific segment. The following questions are commonly asked to decide whether or not the segment can be used for developing marketing plans. Can the segment be measured? It might be possible to conceive of a market segment, but it is not necessarily easy to measure it. For Nestle, they focus on children and their parents who have outlook be measured by market research. Is the segment big enough? There has to be a large enough potential market to be profitable. Because of the population in Vietnam is almost young population and the main customer of Nestle is children so the segment is big enough that can bring the profit for Nestle. Can the segment be reached? There has to be a way of getting to potential customers via the organizations promotion and distribution channels. Nestle should provide many promotion on its packaging. Furthermore, they need to show the information of nutrition about the products. The main segment is parents of children, who like to drink Nestle, so they need to know about which benefit that Nestle can provide for their child. Do segments respond differently? If a customer is not responding to promotional ads for products or services that means Nestle is targeting the wrong segment. It is risky to try to appeal to all segments simply because some are likely to be unresponsive. If no one responds, the revenue stream will end here. This is why understanding market segments are so very important and Nestle should create carefully a strategic plan suitable for the market in Vietnam.

Can the segment be reached profitably? The most important aspects of profitability are the potential for market growth, the amount of market competitiveness, and the available market access. This is very essential question because profit is the one of important factors that the company needs to run on their business. They need to know how much profit they can receive from this segment. In addition, they should know the identified customer needs, cost less to satisfy than the revenue they earn. Is the segment suitably stable? The stability of segment is important, if Nestle is to commit huge production and marketing resources to serve it. They do not want the segment to disappear next year. Of course, this may not matter in some industries. Nestle is a big company, so they need to identify how long the segment suitably stable with the intention of investing the money for its business. They also need stable market to maintain their profit and customers. Target markets: For Nestle, they focus on concentrated marketing, which just provide the product for one segment that is parents of children, and differentiated marketing which Nestle introduces several products versions such as Nestle Chuckie and Reni. Nestle had chosen two policy options which bring to them a large and various market in order to easy to provide the products for their customer. However, these options also bring some disadvantages. For the disadvantages of differentiated marketing are the additional costs of marketing and production such as more product design and development costs, promotion costs and so on. For the disadvantages of concentrated marketing is the business risk of relying on a single segment of a single market. Segmenting consumer markets of NESTL CHUCKIE: Segmentation by location: Chuckie is distributed all most in cities having many customers who have income higher than countryside. Furthermore, the target markets of Chuckie are middle and upon classes who living at cities. Chuckie also focus on the region which has hot weather because it provides the energy and solves thirst for customers. For example, Chuckie gives out energy-releasing nutrients such as Protein, Carbohydrates, Fat, Thiamine, Riboflavin, Niacin, Vitamin B6 and Vitamin B12. Segmentation by demography. Chuckie focuses on the children and teenagers who would like to use chocolate flavor. Chuckie attracts customer not only for boys but also for girls. Product usage segmentation: It focuses on the middle and upon classes who would like to use the high quality products. Moreover, it focuses on children who lack of nutrition or vitamin and slow bone development because Chuckie also builds up child's bones and makes them strong as it contains Calcium, Vitamin D, Phosphorous and Magnesium.

Explain how buyer behavior for the products might affect the companys marketing activities in the two different markets: Whilst recognizing the fact that there are a number of alternative patterns of buying behavior, it is perhaps useful to consider the mental processes through which the consumer moves when deciding to purchase a product. There are some factors of consumer buying behavior: Need recognition: Nestle needs to do at this stage are determine the factors and situations that usually trigger consumer need recognition .It means that marketers should research consumers to find out what kinds of need (need energy or thirsty), when the customer need the products (summer or after play sports) or problem arise, what brought them about and how they led the consumer to this particular product. By gathering such information, they can identify main factors that most often trigger interest in the product for tailoring their products and services or designing promotion programs that involve these factors. Furthermore, Nestle also applies some marketing activities such as checking periodic health like Nestl for global child health and The Phu Dong health, or applying principle 60/40+ which provides nutrition to children. Moreover, they use famous person such as Dong Nhi and Noo Phuoc Thinh for promotion to attract fans of Dong Nhi and Noo Phuoc Thinh. Information search: After a problem or need has been identified, the consumer begins searching information for a solution. In order to getting information, customers often receive the information from: o Personal sources: Customers will ask or receive advices from their family, friends, neighbors and work colleagues. Therefore, Nestle should provide the best products in order to create a good experience for customers who can share their satisfaction for their relationship. This will help Nestle attract customers and build a good relationship with customers. For example, Nestl 1000th anniversary of Thang Long-Hanoi with the people of Vietnam. This is activity marketing which introduces and supplies information for new products. o Commercial sources: They will get information from direct mail, salespeople, packaging, and displays. It means Nestle should have good relationship with suppliers who will share information for customer or provide a good place for displays their products such as Nestle has some marketing activities with Metrol and Big C in order to promote their productions. Moreover, Nestle should offer information not only by using mail but also on the packaging. Nestle had applied a hotline (08)38126066 for customers.

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o Public sources: They will search information on mass media or customer rating organizations. Consequently, Nestle has already used promotion or advertisement for their products on TV, internet, radio, or newspaper to provide the information its products. Furthermore, if they meet the satisfaction of customers who will rate for the company such as they had opened a website talk with Nestle which customers can vote for the production and give feedback to Nestle. Customers will rely on this to identify the information. o Experiential source: It means customers have already used Nestles products by handling, examining, using the products or seeing the product in use. Nestle had cooperation with Big C for opening a show that customers can use Nestles products without money. Evaluation of alternatives: Consumers are likely to build up a set of brand beliefs about the position of each brand with regard to each attribute. The sum of these brand beliefs will make up the brand image. Consumers will probably choose the brand that maximizes benefits to them. In order to ensure that the brand has the best chance of being chosen by the consumer, the Nestle has a range of options for action including the following: o Modifying the brand: It means if Nestle has a low the brand image, they must to change, offer more of the attributes that the buyer desires in order to get more satisfy and more profits. For instance, Nestle applies Strategic brand new stage which is globalization gives them the opportunities to restructure the production process in a way more reasonable. o Altering beliefs about the brand: It means when Nestle lost the trust or has a low belief, they must to change the beliefs by providing good service and products for customer. Moreover, Nestle also need to step up or move up their trust with the purpose of let the buyer will recognize or know about its products and they will be trust. For example, marketing of products which alternative breast milk in accordance with international rules of the World Health Organization (WHO Code) and the laws Vietnam or protect the environment or meet the standards of business ethics. o Altering beliefs about competitors brands. This means Nestle must compare its brand with its competitors. They must to show that who they are, what is the best its product to offer to customers such as price, quality, easy to use or support services and what make competitor lose. For instance, Nestle always not only provides more and more chocolate but also supplies more nutrition and vitamin into its products or performance principles 60/40+ . However, it does not mean that Nestle must destroy their competitor by using bad strategy. o Altering the importance weighting of attributes. It means Nestle would try to persuade consumers to attach more importance to the product attribute in which the brand excels in order to get the satisfaction of customers.

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o Calling attention to neglected attributes, particularly if the brand excels in these attributes. Nestle needs to remind the customers how good they taste. For example, Nestle always opens the show to introduce new productions or promote and advertise its products on TV or Internet or invest for its brand such as pictures group birds are the symbol of the product. o Shifting the buyers ideals. It means Nestle would attempt to persuade consumers to change their idea level for one or more attributes. Nestle uses many marketing strategies and PR for changing customer thinking. Purchase decision: Having evaluated the range of brand choices the consumer may have formed a purchase intention to buy the most preferred brand. The first factor is the attitudes of others such as friends or family of buyers can impact on their decisions even they already chose which product is the best choice. If Nestle provides good products and uses word of mouth, customers will choose its products. Furthermore, they also need to use more advertisement and promotion to change customers mind. The second factor is purchase intention which is also influenced by unanticipated situational factors that may intervene between purchase intention and decision. Such factors could include a change in financial circumstances such as redundancy, or circumstances in which some other purchase becomes more urgent. For example, Nestle had opened the website www.trieunucuoixuan.com for Nestl promotions or customers can use hotline (08)38126066. Post purchase evaluation: Having purchased the brand the consumer will experience some level of satisfaction or dissatisfaction, depending on the closeness between the consumers product expectations and the products perceived performance. These feelings will influence whether the consumer buys the brand again and also whether the consumer talks favorably or unfavorably about the brand to others. Nestle needs to provide many good services such as providing V.I.P card, customers care. Moreover, they should build long term relationship or inform its customers by promotion or provide feedback survey in order to develop their products and meet the satisfaction of customers.

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