Nestle Malaysia Berhad : Creating and Managing Brand

Equity

FACULTY OF BUSINESS MANAGEMENT

Master in Business Administration

2014
MARKETING MANAGEMENT (MKT 750)

Term Paper:
Nestle Malaysia Berhad
Creating and Managing Brand Equity
Prepared by:
Farah Nadiah Ibrahim
2013812912

Prepared for:
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Nestle Malaysia Berhad : Creating and Managing Brand

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Assoc Prof Dr Yeop Hussin B. Bidin
Nowadays, the business world becomes more aggressive in order to capture their
market segment and surprisingly they want to be the number one brand that
everyone remembers the most. Actually, for the most valuable global brands they are
focusing on every detail of their brands, honing simple, cohesive identities that are
consistent in every product, market and contact with consumers. Meaning that, they
are very concern and aware about their brand image that will bring to the
compatibility with their target market. All the brands racing and compete each other in
order to market and present themselves. The best brand also intensely creative in
getting their message out. Building a brand is not as easy as we can see. Some of
the brands had use different campaigns for different consumers. They deliver the
messages using multiple media channels. Here, we can see that the roles of the
marketers are very complicated. They have to think outside the box in order to come
out with brilliant ideas to tell the very simple and meaningful message to the
customers that will stick at the heart of them. In order to create brand awareness, the
marketing strategy is very useful. Promotion department should be more creative,
innovative and open minded to create something fresh to the audience. For sure,
defining the brand is one of the parts but to communicate it to the end user is the real
task. Every single brand in the market can be successful if the way they
communicate and deliver the message is right enough.
The Concept of Brand Equity and Brand Management
All the company in the market wants to be a leader in their categories. Every single of
them wants to achieve the brand equity. Brand equity is refers to the added value a
brand name bestows on a product or service beyond the functional benefits provided
(Roger A. Kerin, Robert A. Peterson, 2013). Brand equity will bring advantages to the
brand owner. The brand owner will have competitive advantage compare to other
brand and also customers are willing to pay higher price. Indirectly, it influences the
brand image of the company. As I said before, to be a strong and competitive brand
in the market it doesnt happen naturally. Everyone wants to be a leader and how
they act towards it? Brand equity must be build by having good marketing programs
that will realize the dream. It is not the size of the brand equity but it is how the
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company uses it. In order to build a strong brand, people always ask about the brand
identity, brand meaning, brand responses and brand relationships.
Firstly, in order to build brand identity it requires creating brand that is attracting and
innovative to the customers. The unique brand will become brand awareness and will
make customers easy to recall and recognize. Building brand awareness is refers to
the ensuring customers understand the products and services deeply. Usually, when
a single brand in the market get attention from customers, the brand will be very fast
sold out. Meaning that, brand awareness of that products or services is very high.
The right time and the right place also play an important factor towards brand identity.
People will easily influence with the setting of the products or services. If it is readily
available of course the customers will grab and do not think so much.
Secondly, after create awareness of the products and services it should be followed
by the brand meaning. The brand should have their own meaning that will give a
brand image to customers mind. Brand meaning involves brand imagery that can be
link and meet customers. There are three key dimensions of brand meaning which
are strength, favorability and uniqueness. Actually, the meaning must give a big
impact to the customers so that they will remember it always. If the all dimensions are
successful implement, so it will lead to the good brand response from the customers.
Thirdly, the brand responses can be known from the marketing activities. The most
important thing here is what customers think and feel about the products or services.
People will make a judgment towards the quality, credibility, consideration and
superiority. Of course the first thing comes to mind is about quality of that product. It
is a natural attitude of customers that always see something in quality perspective.
Credibility is refers to the how that product can differentiate it existence compare to
other product in the market. Consideration is about what customers think towards the
product until they make decision to buy. Meaning that, consideration is made when
the brand is appropriate and meaningful to them. Superiority is when customers view
the brand as unique as and better than other brands. Then, they will make it the first
choice. Response also can be identified through the customer feeling.

Nestle Malaysia Berhad : Creating and Managing Brand

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Lastly, the brand relationship is refers to the further relationship with the customers.
Meaning that, when the brand is stick in the customer mindset, it will lead to a good
ending which is customers will look for that brand although many other brands in the
market. Usually, this kind of customers are very loyal, have sense of community and
also active engagement towards the brand.
Nestle Malaysia Berhad
Nestle began in Malaysia in 1912 as the Anglo-Swiss Condensed Milk Company in
Penang. After that, it takes a move to Kuala Lumpur in 1939. Nestle also produces its
products in seven factories and operates from its head office in Mutiara Damansara .
Nowadays, Nestle employs more than 5000 workers and produces more than 300
Halal products in Malaysia. Actually, Nestle is concern more on household products.
There are Milo, Nescafe, Maggi, Nespray and Kit kat as their brand name.
As we all know, Nestle is one of the establish company that still can survive although
there are many competitors enter the market. Peoples perception towards Nestle is
very high. They tend to choose Nestle as their best brand because of the good
positioning method use by Nestle. To enter the market is easy compare to survive in
the market with full competitors that sometimes sell and produce almost the same
products. Thats why Nestle is very concern about the brand equity building. They are
very enthusiastic to increase their brand image in the market and also in the eye of
the customers.
This can be proved by The Star Online, Wednesday April 18, 2012; Nestle is
continuing their effort to focus more on their branding. Nestle has a long view on the
course of their products. They look for the long term plan because it will give a bright
future towards their products. Price discounting is a short term plan and it do not give
a good impact towards the profit margin to the company itself and of course it just a
very short promotion that can be applied to the customers. Rather than give
opportunities to other brand, Nestle think outside the box to boost the market and be
a leader in household products.
Nestle realize the importance to bring awareness to the customers about their
products. They also trust that in order to be a market leader, they should strengthen
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its brand equity. Without any delivery of messages and communications to the
customers, it will give nothing. Selling the products without any promotion cannot be
successful. So, it is very crucial to build the brand name to make people aware and
know about the existence of the products in the market. Investing in branding must
be done from time to time because other brand will always chase to be in the number
one ranking.
From the news above, we can see that Nestle is eager to take care of their brand and
also target market. They willing to create and manage their brand image so that
people will recognize them. For sure, Nestle vision is to be the leader in nutrition,
health and Wellness Company by delivering world-class products. Nestle aim is to
enhance the quality of consumers lives every day, everywhere by offering tastier and
healthier food and beverage choices and encouraging a healthy lifestyle. This can be
justified by the slogan of 'Good Food, Good Life'.
Creating Brand Equity of Nestle
In order to create brand equity, brand identity is needed. Identity of the brand must be
very close to the heart of the customers. For example, we can see Milo brand is
become the number one drinking for the sport. Nestle is doing their positioning
product class towards Milo brand in the sport area. It gives positive brand awareness
to the customers. Until now, the brand is so strong in the market. Maggi also give a
very big impact to the brand of Nestle. Actually, these two brand name had achieve
their brand equity until almost all the customers know the brand and surprisingly they
tend to call the other brand with Milo and Maggi brand. How Rusky might call Maggi?
But, this is what actually happens among the customers. They recall and recognize
the Maggi brand whereas they are preferred to buy other brand. Nestle is very
successful in brand identity.
Nestle tend to involve in heavily and effective promotion strategy. It is true to say that
without any communication strategy there will be no one knows about the brand. The
purpose of the promotion is to make awareness to the customers. Nestle comes with
variety of intelligent ideas in terms of advertising in television in order to attract their
customers. And of course the other side of promotion can be in terms of contest done
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by involving the customers to participate. For example, Nestle open a Janji Sihat
Contest to all customers. This is one kind of promotion that Nestle held in order to
celebrate good nutrition, health, and wellness values. Customers are allowed to
submit the story of Janji Sihat with family. The advertisement through television was
made regarding this contest. Promotion that involves customers as target market is
quite effective because it will give an approach to attract more customers. Before
this, Nestle also had organized Yes No Milo My Story Contest that invites customers
to create a video about their life. This is actually very interesting way to grab the
customers attention towards their brand. Nescafe also had done some contest which
is What Are You Going to Do Today Contest that start with Nescafe. Meaning that,
Nestle try to keep in customers mind about starting your day with Nescafe. It is all
about how Nestle cater customer's mind and soul.
Nestle also build their brand through creating shared value. Creating shared value is
about sharing the excitement to the community. For example, Nestle positioned their
brand name through nutrition, water and rural development. These areas are core to
their business strategy and operations. They belief that for a company to be
successful over the long term and create value for shareholders, it must also create
value for society. Community is very important to every single company. Each brand
can be alive when there is a support from the community. So, thats why it is crucial
to make relationship with them.
Nestle in society:
1. Nestle Paddy Club provides additional income to the farmers in Kedah. Here,
Nestle brings together the benefits of water usage. There are three objectives that
can be getting from this kind of activity such as farmers will get some new
knowledge about how to increase yields, promote the eco-friendly planting
methods which is reduces water usage and provides a potential for them to get
extra income from increased yields.
2. Nestle Project RiLeaf in Malaysia is a reforestation initiative to create a landscape
where people, nature and agriculture are united by the source of water. This
activity is done in Lower Kinabatangan. Objectives of this activity is to make a
friendly forest connectivity and to minimize water pollution. Local community
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supply forest tree seedlings and provide services for their plantings in this
reforestation activity.
3. Nestle also plays an important roles towards rural development. There are two
activities that had been done. First, red rice farming that Nestle signed agreement
with MARDI for formal reserach and development for agriculture. Full contract
farming that involved more than 500 farmers and covering farmland in Sarawak.
Second, Nestle also involved in chilli contract farming in Kelantan since 1995.
Demonstration and trainings are organized to focus on increasing productivity,
reduce farm costs, minimize environmental impact and enhance farmer work
safety.
Nestle is very commited towards their action in sustaining and boosting their
brand image. They belief that a good promotion strategy cannot be stand alone
without any activities that can be related face to face with community. At the same
time, Nestle and society can exchange knowledge and also expertise. Indirectly, it
can build Nestle name towards society. Thats why Nestle try to attract their
customers in various dimensions so that people will know better the brand. Other
than reducing price or price discounting, Nestle belief that if the way to treat
customers is right and effective it doesnt give any problems.
Implications towards Managing Brand Equity of Nestle
Nestle is very responsible for improving the quality of their brand. Managing brand
equity will reduce marketing investment. A strong brand name actually needs
lower investment to sustain itself over time. But, for sure the new brand will have
to spend a lot in order to achieve the highest performance of their brand. Through
the brand equity, it is easy to Nestle to target and budget primary sales rather
than un-established brand. Strong brand always account for more stable
businesses. Brand equity also commands a premium which is consumer will
always be willing to pay more for it. Meaning that, people are willing to get and
grab Nestle products because of their good offering. Nestle also can increase
value of the business through managing brand equity. For example, it will give a
good brand image towards international company and also for the competitors.
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Managing brand equity also facilitates to get customer acquisition, retention and
profit margin.
Conclusion
To achieve brand loyalty from the customers is not easy furthermore there are
many competitors in the market that have similar offerings. Nestle wants to be a
leader in Nutrition, Health and Wellness so that they have to build their brand to
make it known by others. Nestle never refused to improve the quality of their
products. They tend to invest in the brand building program in order to cater their
target market.
References
1. Global Brands, Business Week (August 1, 2005):85-90
2. (n.d.). Retrieved from Nestle Malaysia.
3. Florian Stahl, M. H. (2011, December). The Impact of Brand Equity on
Customer Acquisition,Retention and Profit Margin.
4. Rebecca J.Slotegraaf, K. P. (n.d.). The Impact of Brand Equity and Innovation
on the Long Term Effectiveness of Promotions.
5. Tuominen, P. (n.d.). Managing Brand Equity.