Advertising and

Promotion Strategies
by Nestlé

Submitted by:

Bhanu Tyagi (188914)

Nestlé
Nestle is a Swiss multinational food and drink processing conglomerate corporation
headquartered in Vevey, Vaud, Switzerland. It is the largest food company in the world,
measured by revenues and other metrics, since 2014. It ranked No. 64 on the Fortune Global
500 in 2017 and No. 33 on the 2016 edition of the Forbes Global 2000 list of largest public
companies.

Nestlé was formed in 1905 by the merger of the Anglo-Swiss Milk Company, established in
1866 by brothers George and Charles Page, and Farine Lactée Henri Nestlé, founded in 1866
by Henri Nestlé. The company grew significantly during the First World War and again
following the Second World War, expanding its offerings beyond its early condensed milk and
infant formula products. The company has made a number of corporate acquisitions, including
Crosse & Blackwell in 1950, Findus in 1963, Libby's in 1971, Rowntree Mackintosh in 1988,
Klim in 1998, and Gerber in 2007.

Nestlé's products include baby food, medical food, bottled water, breakfast cereals, coffee and
tea, confectionery, dairy products, ice cream, frozen food, pet foods, and snacks. Twenty-nine
of Nestlé's brands have annual sales of over CHF1 billion (about US$1.1 billion), including
Nespresso, Nescafé, Kit Kat, Smarties, Nesquik, Stouffer's, Vittel, and Maggi. Nestlé has 447
factories, operates in 189 countries, and employs around 339,000 people. It is one of the main
shareholders of L'Oreal, the world's largest cosmetics company.

Marketing mix of Nestle

The Marketing mix of Nestle discusses the 4P’s of one of the strongest FMCG companies of
the world. The Nestle marketing mix shows Nestle has a strong product line which boosts its
marketing mix. Below are the products, price, placement and promotions of Nestle.

There are 4 different strategic business units within Nestle which are used to manage various
food products.

Beverages – One of the most known coffee brands Nescafe, belongs to the house of Nestle and
is one of the cash cows for Nestle. However, it is not the biggest cash cow. Nestle has a
worldwide distribution and has many different variants. Looking at India, Nestle has also
launched Nestea.

Milk and Milk products – Nestle everyday, Nestle slim and Nestle Milk maid are some of the
milk and milk based products from the house of Nestle.
Prepared dishes and cooking aides – Nestle has a third category of products which comes into
prepared dishes and cooking aides. The major cash cow of Nestle lies in this segment, which
is Maggi Noodles. Probably one of the most widely sold ready to cook noodle brands is Maggi.
Maggi has a fantastic taste and quality. Thus, it was not a surprise, that Nestle expanded the
Maggi brand to create an umbrella of different products like Maggi pasta, Maggi sauce, Maggi
cubes etc. The maggi range contributes vastly to the bottom line of Nestle.

Chocolates – Nestle has some popular chocolate products, most popular being Nestle Kitkat,
Munch, Milky bar, Eclairs and Polo. The newly introduced Alpino is targeting the gifting
segment in response to various chocolates like Dairy milk and Bournville by Cadbury. The
chocolates segment of Nestle is a star, where the competition is high and the expense is high
but at the same time the market size is huge as well. The appreciable factor in Nestle is that
quality maintenance of products is upto mark and there are hardly any complaints about Nestles
products in the market. This is a major achievement for a company which relies majorly on
food products.

Price in the Marketing mix of Nestle

The price is dependent on the market of each individual products.

For example, Nescafe and Maggi being the clear leaders are priced with higher margins for the
company as compared to competition. This is because the product quality is good enough and
a bit of skimming price will not cause the customer to switch brands.

The strength of pricing for Nestle comes from its packaging or consumption based pricing. For
Nescafe as well as Maggi, Nestle offers a lot of sizes and package options. In supermarkets,
you can even find a 16 packet maggi whereas in small retail shops, you can find 5 rs maggi.

Thus, with the variety available, customer can make his own choice based on his consumption.
In other products like Kitkat and Munch, due to tough competition from other companies,
Nestle offers competitive pricing. You will find that nestle will be similar priced to many of
Cadbury’s Products in the chocolate segment.
Place in the Marketing mix of Nestle

Nestle follows the FMCG strategy of distribution which involves breaking the bulk. The typical
distribution strategy of Nestle is as follows.

Manufacturing >> C & F agent >> Distributors >> Retailers >> Consumer

Manufacturing >> Bulk buyers >> Consumer

These are the two different forms of distribution which Nestle has. It is typical of any FMCG
company. However, the Nestle channel is known to be strong with a good marketing and sales
network for channel distribution.

On top of it, Nestle regularly introduces trade discounts and various tactics to keep the channel
motivated. The major challenge is in the distribution of Maggi which is the most in-demand
product along with Nescafe. Due to these two products, Nestle is able to drive other products
in the market as well. Thus, on purchase of one weak product, the distributor might get a
discount on the stronger product or vice versa.

The challenge for Nestle is in the chocolate segment where it faces stiff competition from
Cadbury and hence selling the chocolates becomes difficult. Kitkat might have its own brand
positioning, but it is not better than Dairy milk. Thus, converting retailers to sell Nestle instead
of Cadbury is the toughest task for Nestle. This is converted mainly through promotions.

Promotions in the Marketing mix of Nestle.

One of the most widely known tunes is the Nescafe tune. It was one of the best advertising
campaigns and was launched at least 2 decades back. However, that campaign brought Nescafe
strongly in the market. On the other hand, Nestle’s brand was pushed by the excellent product
quality of Maggi and the witty and innovative campaigns of Maggi. Where Nescafe focuses on
value and the good things in life, Maggi focuses on moments you had with your Maggi. The
recent campaign was completely focused on your maggi story, where people had to come out
with various innovative ways that they had their maggi.
Promotions for other products too is done smartly. Kitkat focuses on “Take a break” and has
done some good marketing for the same. Kitkats website too is very innoative and shows
nothing but asks the visitor to take a break and have a Kitkat. The major push expected of a
FMCG company is in sales promotions at the ground level. This is where Nestle really rocks.
Nestle focuses on its strength which is Maggi, Nescafe and Kitkat which are the most promoted
brands in the market on ground level.

Besides this, Nestle regularly uses TVC’s and ATL marketing. It is also present online through
some smart creative.

Nestle Promotions

 2016-2017 Nestle Coffee Regular Activities: Conduct continuous education of the

consumers in peak season to raise the visibility and recognition of the brand of Nestle
Coffee and enhance the effective communication with its consumers. Make sales
promotion of the other series of products while increasing the sales of Nestle Coffee
1+2 series.

 2017 Nestle Ice Coffee In-Store Activities: Provide coffee for consumers and cultivate
their new ways of drinking coffee. Increase the opportunities and frequencies of coffee
drinking. In off-season, beat competing products by free -drink activities to increase the
sales and market share of Nestle Coffee.

 2016-2017 Nestle Coffee Roadshow: Based on the mature consumers in the 1st-tier and
2nd-tier cities, vigorously promote Nestle Coffee in the 3rd-tier and 4th-tier cities.
Carry out instructions on drinking habits for consumers to enlarge consumer group.
Enhance the brand influence. By Nescafe Coffee Roadshow, the popularity and
visibility of Nescafe Coffee have been greatly enhanced, consumer sampling has
increased and on-site purchase has climbed.

 2017 Nestle Crispy Chocolate Waffle Roadshow: Enhance the overall brand image of
Nestle Crispy Chocolate Waffle and popularity of its new brand by taking advantage of
new product launch. Encourage the consumers to taste new products and increase their
identity toward the product, and effectively increase the sales. Large-scale Nestle
Crispy Chocolate Waffle Roadshow Activities have been carried out.
  2017 Nespresso Personnel Management: To look for the best baristas compatible with
Nestle Dolce Gusto. What we need is more professional talents. Beyond coffee selling,
more Dolce Gusto notions about coffee are to be promoted. It is expected that more
people know well of coffee, love drinking coffee and find Dolce Gusto Nespresso
coffee to their flavors.

Consumer Awareness & Retention Strategies

 2017 Nespresso Personnel Management: Seek, cultivate, and motivate Nespresso

personnel with good performance salary so that the consumers have personal café-style
experience.

 2016-2017 Nestle Coffee Regular Activities: Conduct centralized promotion through

multiple channels by the way suitable to the store features in different cities.

 2017 Nestle Ice Coffee In-Store Activities: Offer customers with new tasting
experience by providing free drink.

 2016-2017 Nestle Coffee Roadshow: Gain insights into the consumption features and
shopping habits of Bcity consumers; Hold interesting activities to attract target groups
to participate in and enhance the cohesion of consumers in NESCAFE area; Carry out
stage and off-stage activities in turn at regular time to arouse on-site attention; Enhance
the consumers’ intuitive understanding of the products and gain the possibility of on-
site purchase after salespersons offering introduction, guidance and free gifts support
to purchase; Reach final purchase on site under the drive of preheating activity, discount
in limited period and prize drawing.

 2017 Nestle Crispy Chocolate Waffle Roadshow: Enable the consumers to experience
more beyond good taste and have pleasant moods
Effects
 2016-2017 Nestle Coffee Regular Activities: Ensure the activities being held in all the
shops with the KPI completion rate up to 99%;

 2017 Nestle Ice Coffee In-Store Activities: Effectively increase the product sales in off-
season;

 2016-2017 Nestle Coffee Roadshow: Ensure the activities being held in all the shops
with the KPI completion rate up to 100%,winning high recognition from consumers;

 2017 Nestle Crispy Chocolate Waffle Roadshow: Ensure the activities being held in all
the shops with high rate of on-site purchase and high number of on-site participants,
laying good foundation for follow-up new product promotion.

 2017 Nespresso Personnel Management: Increase sales by constantly enhancing the

product knowledge and professionalism of BAs.