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Assignment
                   On
         Marketing Strategy of
       Nestle Bangladesh Limited

Course: Principles of Marketing (MKT101)


             Prepared For

              Kashfia Ahmed
               Senior Lecturer
  Department of Business Administration
           East West University




              Prepared By

Emranul Islam              (2009-2-10-064)
Emran Hossain Niloy        (2009-2-10-252)




                      East West University
Table of Content
     Serial                 Topics Name         Page
      No.                                       No.
1.            Executive summary
2.            Historical Background Of Nestle    01
3.            Company Profile                    02
4.            Theoretical Consideration          03
5.            Marketing Strategies               03
6.            Market Segmentation                03
7.            Market Targeting                   06
8.            Market Positioning                 07
9.            Conclusion                         10
Executive Summary

Nestle is a worldwide company of milk products and nutrition, beverage, catering
and many type of confectionary goods. It has its millions of customers worldwide.
Nestlé Bangladesh Limited, a wholly owned subsidiary of Nestlé S.A., started its
commercial production in 1994 .Today Nestlé Bangladesh Limited is strongly
positioned to grow through its policy of constant innovation and renovation,
concentrating on its core competencies and commitment to high quality, with the
aim of providing the best quality food to the people of Bangladesh.


In the report we have brought a discussion about the marketing Strategies of
Nestle through segmentation, their target market and positioning.


The way Nestle identify its different target customers different demands with an
efficient way and how it satisfies its consumers by creating greater facilities by the
combination of separate products or marketing mixes are shown in market
segmentation of Nestlé. In the part of market targeting we have discussed how
Nestle have made various segments and decided to spread their whole operation in
whole Bangladesh. In the last part of this we
have discussed how Nestle reached to the customers point more effectively
comparing with their competitors in the highly competitive food& beverage
market of Bangladesh by making differentiation of target customers.
Historical Background of Nestle

Nestle is the largest nutrition and foods company in the world, founded and
headquartered in Vevey, Switzerland. The journey of Nestle begins when Henri
Nestlé developed the first milk food for infants in 1867, and saved the life of a
neighbor’s child. He invented a food for the infant babies who are unable to take
mothers feed can use it as an alternative food.Henri Nestle retired in 1875 but the
company was going on a full swing. In the following year the Nestlé company
added condensed milk, so that the firms became direct and fierce rivals. After that
the company was merged in 1905 with the another company named Anglo-Swiss
Milk company which was founded by two brothers named George Page and
Charles Page. The company grew significantly during the First World War though
it fall in debt, a banker help it to reduce its debt. After the Second World War, the
company eventually expanded its offerings beyond its early condensed milk and
infant formula products. The 1920s saw Nestlé's first expansion into new products,
with chocolate the company's second most important activity. Nestlé felt the
effects of World War II immediately. Profits dropped from US$20 million in 1938
to US$6 million in 1939. But at the end of World War II was the beginning of a
dynamic phase for Nestlé. Growth accelerated and companies were acquired. At
present the company operates in 86 countries around the world and employs nearly
283,000 individuals. In the year of 1994 it started its business in Bangladesh.
Company Profile:


Net Income         CHF 10.43 million
Employees          1400
Website            www.nestle.com
Headquarters       Gulshan Tower (4th Floor) Plot 31, Road 53, Gulshan
                   North C/A Dhaka 1212
Key People         Peter Brabeck-Letmathe (Chairman), Paul Bulcke (CEO)
Industry           Food Processing
Products           Milk products, beverage, catering. baby food
Revenue            CHF 107.6 million
Theoretical Consideration:

Marketing Strategies: The Strategic plan defines the company’s overall mission
and objective and hopes to achieve company’s objectives. Through market
segmentation, targeting and positioning the company decides which customers it
will serve and how. The company also designs a marketing mix made up of factors
under 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 why
they are doing their activities in main and metropolitan cities of Bangladesh. They
want to keep babies and children healthy and ensure their proper nutrition. That’s
why majority of their products are baby food products. They also target new
generation to build a strong relationship by providing various food products.

In the report, we are going to focus on Marketing Strategies of Nestle is to
segment, target the potential customers and to positioning of their profit oriented
products. Their segmentations, targeting, positioning process are given below.

They want to move customers toward their products. That’s why they are offering
new products continuously. They also arrange many social competitions for babies
to enter their mind.

In this report we are going to focus Marketing Strategies of Nestle Bangladesh
Limited is to segment, target the potential customers and to position of their profit
oriented products. The relevant information is given below.


Market Segmentation:

The marketing concept calls for understanding customers and satisfying their
needs better than the competitors do. But different customers have different needs
and it rarely is possible to satisfy all customers by treating them alike. Market
segmentation is the identification of portions of the market that are different from
one another. Segmentation allows the firm to better satisfy the needs of its
potential 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.
Bases for Segmentation:

Consumer markets can be segmented on the basis of following customer
characteristics.
   1. Geographic
   2. Demographic
   3. Psychographic
   4. Behavioral

Geographic:

Weather: Nestlé Bangladesh Limited segmented its market for Nescafe Ice based
on the geographic weather: hot and cold.

Nescafe Ice: A coffee which can be consume with ice. During hot season
consumers consume this coffee with normal or cold water with ice cube to bring
freshness in their mind.


Demographic:

Age: Nestlé segmented market for its major products based on the age. For the
products Cerelac, Lectogen, Koko Krunch, Nido, Nestle divided the market
segment for baby and children of different ages.

Nido: It is nutritious milk specially formulated for children 2 years onwards. It
contains 25 minerals and vitamin D which helps child’s growth.

Cerelac: Nestle also offers cerelac for new born baby. It contains milk and rice
mixed for under one year’s baby. It fulfills baby’s proper nutrition.

Nesquick, Koko Krunch: Both are chocolate milk for children.Nesquick and
Koko krunch maintain child’s proper growth. It’s very delicious and also contains
vitamin protein, mineral.

Lactogen: Nestle Bangladesh brings full cream milk powder in our country. It
gives baby proper nutrition.Lactogen 1 is for babies whose age less than 7 months
and lectogen 3 is for babies whose age is below 12 months.

Income: Nestle segmented their market based on customer’s income in an
effective way.
Lectogen: Nestle charge tk 800 for per 900 gm Lectogen 12 milk powder. They
also charge tk 1000 for 900 gm Lectogen 3 milk powder pack. Middle income and
low 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 more
freshness. Both the male and female who need more caffeine Nescafe classic is for
them.

Psychographic:

Life style and personality: Nestle Bangladesh provides KIT KAT these people
who really want to enjoy chocolate. Nescafe 3 in 1 is for exclusively those
customer’s who are really busy and do not have enough time. They can save their
time 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 an
effective way. So they provide Cerelac for those customers who want more
benefits from the products. Cerelac contain a high nutrition for baby’s whose age
below 1 year. Two most important elements rice and milk remain mixed in
cerelac. On the other hand, cerelac contains vitamin, mineral and all nutritious
elements for babies.


Target Marketing:

Market segmentation reveals the firm’s market opportunities. Then the firm sort
market targeting by evaluating the various market segments and deciding which
and how many segments it will target.

Nestle Bangladesh Ltd evaluated the various market segments on the basis of
segment size and growth, segments, structural attractiveness, and company
objectives 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 coverage
strategies:
Undifferentiated: Nestlé has offered several products such as Nescafe 3 in 1
Maggi noodles, and Kit Kat to the people of the whole Bangladesh without
differentiating the market segment.
Differentiated: Nestle also selects the differentiated marketing. It offers different
product for different segments based on different age, occupation, season and
climate.

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 market
position because of its greater knowledge of consumer needs. In the niches it
serves and special reputation it acquires. Nestlé specializes in producing baby
foods. It offers nutritious milk powder Lectogen 1 for babies whose age is less
than 7 months and lectogen 3 for babies whose is under 12 month. It also offers
baby nutrition cerelac for baby less than 1 year.

Positioning Strategy:

By creating product, service, channel, people and image differentiation Nestle
reach the consumer touch point more effectively & efficiently in comparing with
their competitors in the highly competitive food processing sector.

Product Differentiation: Nestle brings a lot of product for target customers. They
provide 25 types of minerals in Nido for children. It also provides Cerelac and
Lactogen1 &3 for newly born baby exclusively. Now the doctors prescribe these
products for babies to their parents for high nutrition Nescafe is a product which
contains 4 types of categories. They offer Nescafe ice for hot weather, classic for
all 3 in 1 for those who are busy. They provide Maggi including Maggi instant;
Maggi 2 minutes which contain various minerals, vitamins and nutritions.Maggi
also provide magi healthy soup and Maggi corn soup but charge the same price.

Channel Differentiation: Nestle reach their products to the customers through
their expert market salesman and transportation. So that their products are much
available to their respective customers.

Image differentiation: Nestlé’s logo is totally different from its competitors that
are greatly accepted by its customers. For that reason customer easily identify
them in the market which is another effective advantage for Nestle.
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 less
Benefit




                                                                                      Less for
                                                                                      much less
          Less
More for more: More for more positioning involves providing the most upscale
product or service and charging a higher price to cover the higher cost. Exactly
Nestle is doing that. Nestlé’s products provide more benefit and for that Nestle
charge higher price than other competitors.Nido ensure nutrition and charge 250 tk
for 400 gm.But Fresh, Marks do not ensure nutrition and charge less than that of
Nido.Respectively Nescafe, Maggi noodles ensure quality for high price, rather
than competitors.


Positioning Statement

Baby Products: To babies who are deprived of proper nutrition, Nido, Cerelac,
Lactogen are the nutritious milk Product that give you more nutrition then any
other 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 it
has the highest level of caffeine,

Maggi: To people, noodles and soup consumer who seek better quality, Maggi
noodles and healthy soup that gives you proper nutrition than any other brand
because it has the best quality.

Their motto for business is “GOOD FOOD GOOD LIFE”
Conclusion: the advent of consumer food products has brought a immense
change in the field in the consumers food habit. Nestle has done well to enhance
its customers loyalty operating as a market challenger in its industry. Nestle is one
of the largest food processing company. Their products and quality mainly
depends on their experience and efficiency. Nestle believe on quality that leads to
good business and good development. It has segmented the market based on
certain clustered preferences deploying multi-stage segmentation approach to meet
individual needs of the customers. Offering new products would also close its
existing 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 some
recommendations based on the marketing procedure.
Nestle
Nestle

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Nestle

  • 1. Assignment On Marketing Strategy of Nestle Bangladesh Limited Course: Principles of Marketing (MKT101) Prepared For Kashfia Ahmed Senior Lecturer Department of Business Administration East West University Prepared By Emranul Islam (2009-2-10-064) Emran Hossain Niloy (2009-2-10-252) East West University
  • 2. Table of Content Serial Topics Name Page No. No. 1. Executive summary 2. Historical Background Of Nestle 01 3. Company Profile 02 4. Theoretical Consideration 03 5. Marketing Strategies 03 6. Market Segmentation 03 7. Market Targeting 06 8. Market Positioning 07 9. Conclusion 10
  • 3. Executive Summary Nestle is a worldwide company of milk products and nutrition, beverage, catering and many type of confectionary goods. It has its millions of customers worldwide. Nestlé Bangladesh Limited, a wholly owned subsidiary of Nestlé S.A., started its commercial production in 1994 .Today Nestlé Bangladesh Limited is strongly positioned to grow through its policy of constant innovation and renovation, concentrating on its core competencies and commitment to high quality, with the aim of providing the best quality food to the people of Bangladesh. In the report we have brought a discussion about the marketing Strategies of Nestle through segmentation, their target market and positioning. The way Nestle identify its different target customers different demands with an efficient way and how it satisfies its consumers by creating greater facilities by the combination of separate products or marketing mixes are shown in market segmentation of Nestlé. In the part of market targeting we have discussed how Nestle have made various segments and decided to spread their whole operation in whole Bangladesh. In the last part of this we have discussed how Nestle reached to the customers point more effectively comparing with their competitors in the highly competitive food& beverage market of Bangladesh by making differentiation of target customers.
  • 4. Historical Background of Nestle Nestle is the largest nutrition and foods company in the world, founded and headquartered in Vevey, Switzerland. The journey of Nestle begins when Henri Nestlé developed the first milk food for infants in 1867, and saved the life of a neighbor’s child. He invented a food for the infant babies who are unable to take mothers feed can use it as an alternative food.Henri Nestle retired in 1875 but the company was going on a full swing. In the following year the Nestlé company added condensed milk, so that the firms became direct and fierce rivals. After that the company was merged in 1905 with the another company named Anglo-Swiss Milk company which was founded by two brothers named George Page and Charles Page. The company grew significantly during the First World War though it fall in debt, a banker help it to reduce its debt. After the Second World War, the company eventually expanded its offerings beyond its early condensed milk and infant formula products. The 1920s saw Nestlé's first expansion into new products, with chocolate the company's second most important activity. Nestlé felt the effects of World War II immediately. Profits dropped from US$20 million in 1938 to US$6 million in 1939. But at the end of World War II was the beginning of a dynamic phase for Nestlé. Growth accelerated and companies were acquired. At present the company operates in 86 countries around the world and employs nearly 283,000 individuals. In the year of 1994 it started its business in Bangladesh.
  • 5. Company Profile: Net Income CHF 10.43 million Employees 1400 Website www.nestle.com Headquarters Gulshan Tower (4th Floor) Plot 31, Road 53, Gulshan North C/A Dhaka 1212 Key People Peter Brabeck-Letmathe (Chairman), Paul Bulcke (CEO) Industry Food Processing Products Milk products, beverage, catering. baby food Revenue CHF 107.6 million
  • 6. Theoretical Consideration: Marketing Strategies: The Strategic plan defines the company’s overall mission and objective and hopes to achieve company’s objectives. Through market segmentation, targeting and positioning the company decides which customers it will serve and how. The company also designs a marketing mix made up of factors under 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 why they are doing their activities in main and metropolitan cities of Bangladesh. They want to keep babies and children healthy and ensure their proper nutrition. That’s why majority of their products are baby food products. They also target new generation to build a strong relationship by providing various food products. In the report, we are going to focus on Marketing Strategies of Nestle is to segment, target the potential customers and to positioning of their profit oriented products. Their segmentations, targeting, positioning process are given below. They want to move customers toward their products. That’s why they are offering new products continuously. They also arrange many social competitions for babies to enter their mind. In this report we are going to focus Marketing Strategies of Nestle Bangladesh Limited is to segment, target the potential customers and to position of their profit oriented products. The relevant information is given below. Market Segmentation: The marketing concept calls for understanding customers and satisfying their needs better than the competitors do. But different customers have different needs and it rarely is possible to satisfy all customers by treating them alike. Market segmentation is the identification of portions of the market that are different from one another. Segmentation allows the firm to better satisfy the needs of its potential 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. Bases for Segmentation: Consumer markets can be segmented on the basis of following customer characteristics. 1. Geographic 2. Demographic 3. Psychographic 4. Behavioral Geographic: Weather: Nestlé Bangladesh Limited segmented its market for Nescafe Ice based on the geographic weather: hot and cold. Nescafe Ice: A coffee which can be consume with ice. During hot season consumers consume this coffee with normal or cold water with ice cube to bring freshness in their mind. Demographic: Age: Nestlé segmented market for its major products based on the age. For the products Cerelac, Lectogen, Koko Krunch, Nido, Nestle divided the market segment for baby and children of different ages. Nido: It is nutritious milk specially formulated for children 2 years onwards. It contains 25 minerals and vitamin D which helps child’s growth. Cerelac: Nestle also offers cerelac for new born baby. It contains milk and rice mixed for under one year’s baby. It fulfills baby’s proper nutrition. Nesquick, Koko Krunch: Both are chocolate milk for children.Nesquick and Koko krunch maintain child’s proper growth. It’s very delicious and also contains vitamin protein, mineral. Lactogen: Nestle Bangladesh brings full cream milk powder in our country. It gives baby proper nutrition.Lactogen 1 is for babies whose age less than 7 months and lectogen 3 is for babies whose age is below 12 months. Income: Nestle segmented their market based on customer’s income in an effective way.
  • 8. Lectogen: Nestle charge tk 800 for per 900 gm Lectogen 12 milk powder. They also charge tk 1000 for 900 gm Lectogen 3 milk powder pack. Middle income and low 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 more freshness. Both the male and female who need more caffeine Nescafe classic is for them. Psychographic: Life style and personality: Nestle Bangladesh provides KIT KAT these people who really want to enjoy chocolate. Nescafe 3 in 1 is for exclusively those customer’s who are really busy and do not have enough time. They can save their time 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 an effective way. So they provide Cerelac for those customers who want more benefits from the products. Cerelac contain a high nutrition for baby’s whose age below 1 year. Two most important elements rice and milk remain mixed in cerelac. On the other hand, cerelac contains vitamin, mineral and all nutritious elements for babies. Target Marketing: Market segmentation reveals the firm’s market opportunities. Then the firm sort market targeting by evaluating the various market segments and deciding which and how many segments it will target. Nestle Bangladesh Ltd evaluated the various market segments on the basis of segment size and growth, segments, structural attractiveness, and company objectives 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 coverage strategies: Undifferentiated: Nestlé has offered several products such as Nescafe 3 in 1 Maggi noodles, and Kit Kat to the people of the whole Bangladesh without differentiating the market segment.
  • 9. Differentiated: Nestle also selects the differentiated marketing. It offers different product for different segments based on different age, occupation, season and climate. 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 market position because of its greater knowledge of consumer needs. In the niches it serves and special reputation it acquires. Nestlé specializes in producing baby foods. It offers nutritious milk powder Lectogen 1 for babies whose age is less than 7 months and lectogen 3 for babies whose is under 12 month. It also offers baby nutrition cerelac for baby less than 1 year. Positioning Strategy: By creating product, service, channel, people and image differentiation Nestle reach the consumer touch point more effectively & efficiently in comparing with their competitors in the highly competitive food processing sector. Product Differentiation: Nestle brings a lot of product for target customers. They provide 25 types of minerals in Nido for children. It also provides Cerelac and Lactogen1 &3 for newly born baby exclusively. Now the doctors prescribe these products for babies to their parents for high nutrition Nescafe is a product which contains 4 types of categories. They offer Nescafe ice for hot weather, classic for all 3 in 1 for those who are busy. They provide Maggi including Maggi instant; Maggi 2 minutes which contain various minerals, vitamins and nutritions.Maggi also provide magi healthy soup and Maggi corn soup but charge the same price. Channel Differentiation: Nestle reach their products to the customers through their expert market salesman and transportation. So that their products are much available to their respective customers. Image differentiation: Nestlé’s logo is totally different from its competitors that are greatly accepted by its customers. For that reason customer easily identify them in the market which is another effective advantage for Nestle.
  • 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 less Benefit Less for much less Less
  • 11. More for more: More for more positioning involves providing the most upscale product or service and charging a higher price to cover the higher cost. Exactly Nestle is doing that. Nestlé’s products provide more benefit and for that Nestle charge higher price than other competitors.Nido ensure nutrition and charge 250 tk for 400 gm.But Fresh, Marks do not ensure nutrition and charge less than that of Nido.Respectively Nescafe, Maggi noodles ensure quality for high price, rather than competitors. Positioning Statement Baby Products: To babies who are deprived of proper nutrition, Nido, Cerelac, Lactogen are the nutritious milk Product that give you more nutrition then any other 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 it has the highest level of caffeine, Maggi: To people, noodles and soup consumer who seek better quality, Maggi noodles and healthy soup that gives you proper nutrition than any other brand because it has the best quality. Their motto for business is “GOOD FOOD GOOD LIFE”
  • 12. Conclusion: the advent of consumer food products has brought a immense change in the field in the consumers food habit. Nestle has done well to enhance its customers loyalty operating as a market challenger in its industry. Nestle is one of the largest food processing company. Their products and quality mainly depends on their experience and efficiency. Nestle believe on quality that leads to good business and good development. It has segmented the market based on certain clustered preferences deploying multi-stage segmentation approach to meet individual needs of the customers. Offering new products would also close its existing 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 some recommendations based on the marketing procedure.