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Assignment On Marketing Strategy of Nestle Bangladesh Limited

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  1. 1. Assignment On Marketing Strategy of Nestle Bangladesh LimitedCourse: Principles of Marketing (MKT101) Prepared For Kashfia Ahmed Senior Lecturer Department of Business Administration East West University Prepared ByEmranul Islam (2009-2-10-064)Emran Hossain Niloy (2009-2-10-252) East West University
  2. 2. Table of Content Serial Topics Name Page No. No.1. Executive summary2. Historical Background Of Nestle 013. Company Profile 024. Theoretical Consideration 035. Marketing Strategies 036. Market Segmentation 037. Market Targeting 068. Market Positioning 079. Conclusion 10
  3. 3. Executive SummaryNestle is a worldwide company of milk products and nutrition, beverage, cateringand many type of confectionary goods. It has its millions of customers worldwide.Nestlé Bangladesh Limited, a wholly owned subsidiary of Nestlé S.A., started itscommercial production in 1994 .Today Nestlé Bangladesh Limited is stronglypositioned to grow through its policy of constant innovation and renovation,concentrating on its core competencies and commitment to high quality, with theaim of providing the best quality food to the people of Bangladesh.In the report we have brought a discussion about the marketing Strategies ofNestle through segmentation, their target market and positioning.The way Nestle identify its different target customers different demands with anefficient way and how it satisfies its consumers by creating greater facilities by thecombination of separate products or marketing mixes are shown in marketsegmentation of Nestlé. In the part of market targeting we have discussed howNestle have made various segments and decided to spread their whole operation inwhole Bangladesh. In the last part of this wehave discussed how Nestle reached to the customers point more effectivelycomparing with their competitors in the highly competitive food& beveragemarket of Bangladesh by making differentiation of target customers.
  4. 4. Historical Background of NestleNestle is the largest nutrition and foods company in the world, founded andheadquartered in Vevey, Switzerland. The journey of Nestle begins when HenriNestlé developed the first milk food for infants in 1867, and saved the life of aneighbor’s child. He invented a food for the infant babies who are unable to takemothers feed can use it as an alternative food.Henri Nestle retired in 1875 but thecompany was going on a full swing. In the following year the Nestlé companyadded condensed milk, so that the firms became direct and fierce rivals. After thatthe company was merged in 1905 with the another company named Anglo-SwissMilk company which was founded by two brothers named George Page andCharles Page. The company grew significantly during the First World War thoughit fall in debt, a banker help it to reduce its debt. After the Second World War, thecompany eventually expanded its offerings beyond its early condensed milk andinfant formula products. The 1920s saw Nestlés first expansion into new products,with chocolate the companys second most important activity. Nestlé felt theeffects of World War II immediately. Profits dropped from US$20 million in 1938to US$6 million in 1939. But at the end of World War II was the beginning of adynamic phase for Nestlé. Growth accelerated and companies were acquired. Atpresent the company operates in 86 countries around the world and employs nearly283,000 individuals. In the year of 1994 it started its business in Bangladesh.
  5. 5. Company Profile:Net Income CHF 10.43 millionEmployees 1400Website www.nestle.comHeadquarters Gulshan Tower (4th Floor) Plot 31, Road 53, Gulshan North C/A Dhaka 1212Key People Peter Brabeck-Letmathe (Chairman), Paul Bulcke (CEO)Industry Food ProcessingProducts Milk products, beverage, catering. baby foodRevenue CHF 107.6 million
  6. 6. Theoretical Consideration:Marketing Strategies: The Strategic plan defines the company’s overall missionand objective and hopes to achieve company’s objectives. Through marketsegmentation, targeting and positioning the company decides which customers itwill serve and how. The company also designs a marketing mix made up of factorsunder its control product, price, place, promotion.Strategy of Nestle Bangladesh Limited:Nestlé’s basic strategy is to cover only the urban area of Bangladesh. That’s whythey are doing their activities in main and metropolitan cities of Bangladesh. Theywant to keep babies and children healthy and ensure their proper nutrition. That’swhy majority of their products are baby food products. They also target newgeneration to build a strong relationship by providing various food products.In the report, we are going to focus on Marketing Strategies of Nestle is tosegment, target the potential customers and to positioning of their profit orientedproducts. Their segmentations, targeting, positioning process are given below.They want to move customers toward their products. That’s why they are offeringnew products continuously. They also arrange many social competitions for babiesto enter their mind.In this report we are going to focus Marketing Strategies of Nestle BangladeshLimited is to segment, target the potential customers and to position of their profitoriented products. The relevant information is given below.Market Segmentation:The marketing concept calls for understanding customers and satisfying theirneeds better than the competitors do. But different customers have different needsand it rarely is possible to satisfy all customers by treating them alike. Marketsegmentation is the identification of portions of the market that are different fromone another. Segmentation allows the firm to better satisfy the needs of itspotential customers.1. Clearer understanding of the needs and wants of selected customer groups.2. More effective positioning.3. Greater precision in selecting promotional vehicles and techniques.
  7. 7. Bases for Segmentation:Consumer markets can be segmented on the basis of following customercharacteristics. 1. Geographic 2. Demographic 3. Psychographic 4. BehavioralGeographic:Weather: Nestlé Bangladesh Limited segmented its market for Nescafe Ice basedon the geographic weather: hot and cold.Nescafe Ice: A coffee which can be consume with ice. During hot seasonconsumers consume this coffee with normal or cold water with ice cube to bringfreshness in their mind.Demographic:Age: Nestlé segmented market for its major products based on the age. For theproducts Cerelac, Lectogen, Koko Krunch, Nido, Nestle divided the marketsegment for baby and children of different ages.Nido: It is nutritious milk specially formulated for children 2 years onwards. Itcontains 25 minerals and vitamin D which helps child’s growth.Cerelac: Nestle also offers cerelac for new born baby. It contains milk and ricemixed for under one year’s baby. It fulfills baby’s proper nutrition.Nesquick, Koko Krunch: Both are chocolate milk for children.Nesquick andKoko krunch maintain child’s proper growth. It’s very delicious and also containsvitamin protein, mineral.Lactogen: Nestle Bangladesh brings full cream milk powder in our country. Itgives baby proper nutrition.Lactogen 1 is for babies whose age less than 7 monthsand lectogen 3 is for babies whose age is below 12 months.Income: Nestle segmented their market based on customer’s income in aneffective way.
  8. 8. Lectogen: Nestle charge tk 800 for per 900 gm Lectogen 12 milk powder. Theyalso charge tk 1000 for 900 gm Lectogen 3 milk powder pack. Middle income andlow income people are not able to buy these products for their babies.Occupation: Nestle segmented the market based on their customer’s occupation.Nescafe classic: This product is for those who work hard and needs morefreshness. Both the male and female who need more caffeine Nescafe classic is forthem.Psychographic:Life style and personality: Nestle Bangladesh provides KIT KAT these peoplewho really want to enjoy chocolate. Nescafe 3 in 1 is for exclusively thosecustomer’s who are really busy and do not have enough time. They can save theirtime by taking Nescafe 3 in 1.All the things sugar, milk and coffee remain mixed.Behavioral:Benefits: Based on benefits Nestle Bangladesh segmented their market in aneffective way. So they provide Cerelac for those customers who want morebenefits from the products. Cerelac contain a high nutrition for baby’s whose agebelow 1 year. Two most important elements rice and milk remain mixed incerelac. On the other hand, cerelac contains vitamin, mineral and all nutritiouselements for babies.Target Marketing:Market segmentation reveals the firm’s market opportunities. Then the firm sortmarket targeting by evaluating the various market segments and deciding whichand how many segments it will target.Nestle Bangladesh Ltd evaluated the various market segments on the basis ofsegment size and growth, segments, structural attractiveness, and companyobjectives and resources and decided to launch their operation all over the country.Nestle separate their target market because of having unique need and wants.Nestle Bangladesh Ltd selected their target market into two market coveragestrategies:Undifferentiated: Nestlé has offered several products such as Nescafe 3 in 1Maggi noodles, and Kit Kat to the people of the whole Bangladesh withoutdifferentiating the market segment.
  9. 9. Differentiated: Nestle also selects the differentiated marketing. It offers differentproduct for different segments based on different age, occupation, season andclimate.Nescafe 3 in 1: Coffee for people who are busy.Koko Krunch, Nesquick: Chocolate milk who want to get taste of chocolate.Nescafe Ice: Cold coffee for the people in hot weather.Concentrated: Through concentrated marketing, Nestlé achieves a strong marketposition because of its greater knowledge of consumer needs. In the niches itserves and special reputation it acquires. Nestlé specializes in producing babyfoods. It offers nutritious milk powder Lectogen 1 for babies whose age is lessthan 7 months and lectogen 3 for babies whose is under 12 month. It also offersbaby nutrition cerelac for baby less than 1 year.Positioning Strategy:By creating product, service, channel, people and image differentiation Nestlereach the consumer touch point more effectively & efficiently in comparing withtheir competitors in the highly competitive food processing sector.Product Differentiation: Nestle brings a lot of product for target customers. Theyprovide 25 types of minerals in Nido for children. It also provides Cerelac andLactogen1 &3 for newly born baby exclusively. Now the doctors prescribe theseproducts for babies to their parents for high nutrition Nescafe is a product whichcontains 4 types of categories. They offer Nescafe ice for hot weather, classic forall 3 in 1 for those who are busy. They provide Maggi including Maggi instant;Maggi 2 minutes which contain various minerals, vitamins and nutritions.Maggialso provide magi healthy soup and Maggi corn soup but charge the same price.Channel Differentiation: Nestle reach their products to the customers throughtheir expert market salesman and transportation. So that their products are muchavailable to their respective customers.Image differentiation: Nestlé’s logo is totally different from its competitors thatare greatly accepted by its customers. For that reason customer easily identifythem in the market which is another effective advantage for Nestle.
  10. 10. People differentiation: Nestle has a large number of employees that are highly educated and trained. In Bangladesh, 400 employees are working in market Company chairman; Peter Brakeck- Letmathe and CEO Paul Bulcke are highly educated, wise and experienced people. They are running this business successfully for a long time. Service differentiation: another advantage for this company is better service for its respective customers from its competitors. They provide 24 hours hot line service. High quality checking is maintaining for its customers. Its marketing dept. and PR (public relation) dept. are working for finding out customer’s new demands and response toward their products. Selecting an overall positioning strategy: The full positioning of a brand is called the brands value proposition-The full mix of benefits up[on which the brand is differentiated and positioned. The value proposition table shows the product position of Nestle in the following: Price More The same Less More More for More More for same More for less The Same Same for lessBenefit Less for much less Less
  11. 11. More for more: More for more positioning involves providing the most upscaleproduct or service and charging a higher price to cover the higher cost. ExactlyNestle is doing that. Nestlé’s products provide more benefit and for that Nestlecharge higher price than other competitors.Nido ensure nutrition and charge 250 tkfor 400 gm.But Fresh, Marks do not ensure nutrition and charge less than that ofNido.Respectively Nescafe, Maggi noodles ensure quality for high price, ratherthan competitors.Positioning StatementBaby Products: To babies who are deprived of proper nutrition, Nido, Cerelac,Lactogen are the nutritious milk Product that give you more nutrition then anyother brand because these contain different types of vitamin, mineral etc.Nescafe: To busy people who drink coffee and have little time for taking rest,Nescafe is the coffee that gives you more energy than any other brand because ithas the highest level of caffeine,Maggi: To people, noodles and soup consumer who seek better quality, Magginoodles and healthy soup that gives you proper nutrition than any other brandbecause it has the best quality.Their motto for business is “GOOD FOOD GOOD LIFE”
  12. 12. Conclusion: the advent of consumer food products has brought a immensechange in the field in the consumers food habit. Nestle has done well to enhanceits customers loyalty operating as a market challenger in its industry. Nestle is oneof the largest food processing company. Their products and quality mainlydepends on their experience and efficiency. Nestle believe on quality that leads togood business and good development. It has segmented the market based oncertain clustered preferences deploying multi-stage segmentation approach to meetindividual needs of the customers. Offering new products would also close itsexisting products gaps to a great extend ensuring satisfaction and loyalty.In our report, we try to present the Marketing Strategies through segmentation,target marketing and positioning of Nestle Bangladesh Ltd and suggest somerecommendations based on the marketing procedure.