FUNDAMENTALS OF ENTREPRENEURSHIP

GROUP ASSIGNMET

NAME: ISTAFA JAFRI [TP049047]

MEHMOOD KHAN [TP049025] [Group Leader]
HAMZA NAWAZ [TP048985]
JANSHAD PALOLLATHIL [TP047713]
INTAKE: UC1F1802IBM
MODULE CODE: AQ019-3-1-FEP
LECTURER: NORAINI BINTI AHMAD
TUTORIAL: FARAHIDA BINTI ABDUL JAAFAR
TITLE: NESTLE
HAND IN DATE: MARCH 21, 2018
HAND OUT DATE: MAY 8, 2018
WEIGHTAGE: 40%
Contents

1.0 Background
1.1 Vision
1.2 Mission
1.3 Business Strategies of Nestle

2.0 Market Segmentation

2.1 SWOT Analysis
2.1a Strengths
2.1b Weaknesses
2.1c Opportunities
2.1d Threats
2.2 Characteristics of Market Segment

3.0 Marketing Mix of Nestle

3.1 Product
3.2 Price
3.3 Promotion
3.4 Place
3.5 Market Positioning and Competitors

4.0 Marketing Programs by Nestle

4.1 Introduction to Market Strategy
4.2 New Market Strategy
4.3 Proposition for Future Marketing Program Development

5.0 References
1.0 Background

Nestle is a Swiss food and drink company. Their headquarter is in Vevey, Switzerland. It was an idea
of a Single man that became developed into a giant corporation. The idea of Henry Nestle who formed this
in 1866. Henry Nestle was a Pharmacist who developed a milk and food formula for infant who are unable
to tolerate their mother’s milk. This idea became successful and created a demand in Europe. It continued
its position as a successful business. Between 1866 to 1947 things changed, and the company merged with
some companies. It became more and more successful and which gave them a boost to target a new market
worldwide that give them opportunity to become best and biggest food and beverage company in the
world. It is located in Switzerland but has factories in every country at every market segment.
In 1905 the company merged to become Nestle and Anglo-Swiss Condensed Milk Company. It remained
the same till 1947 and then it became Nestle S.A after acquisition with another company. Later on, it
became Nestle S.A in 1977.
After increase in sales and revenue and the size of the company, Nestle increased the variety of products,
Nestle increased growth with renovation and innovation and this allowed them to introduce more products
such as baby food, dairy products, breakfast cereals, ice cream, chocolate and beverages, food services,
water bottle and pet care.
Today Nestle is world’s largest food and beverages manufacturer. It is present in 191 Countries with 7500
brands and it operates 449 factories in the world with 8000 products.

1.1 Vision
Nestle aim is to fulfill every consumer needs by marketing and selling foods with high quality that can
satisfy consumers, in the field of leading, competing, nutrition, health and wellness.

1.2 Mission
Nestle strives and works hard to bring consumer food that are safe, of high quality and provide healthy
nutrients to meet needs of the human body. It influences the social environment in a positive way in which
we operate as responsible businessmen, with due regards for those environment standard and societal
aspiration with improved quality of life. And make better food so that people live a better life.
1.3 Business Strategies of Nestle

Nestle bases its business-level strategic decisions on two main considerations. Market Scope and
Source of Competitive Advantage for the product or service. Market scope states how broad or narrow
the market or target market is. Competitive advantage considers the fact whether it is primarily through
low price or product uniqueness. Nestle uses different strategies to market its product such as; 
1.    Differentiation strategy – Offers products that are unique and different from the competitors.
2.    Cost Leadership strategy – Seeks to operate with low cost so that products can be sold at low prices.
3.    Focused strategy – Concentrates on serving a unique market segment better than anyone else. 
4.    Focused Cost strategy – Strategy that seeks the lowest cost of operations within a special market
segment. 
(Introduction to management by John R Schermerhorn)
2.0 Market Segmentation

 Market Segmentation is a process of studying the particular industry in which the company
needs to compete and determine the different target market in that particular industry.
 Nestle is a food and beverage multi-national company serving worldwide. They understand
customer requirement and know how to satisfy their requirements better than others. They can
divide its market into a workable market segment for example age, income, product type,
geography, buying partners, customer needs and other classification.
 Nestle Nespresso is currently targeting new market in Thailand. Nestle started its first Boutique
in Thailand and trying to target new market with this worldwide.
 Nestle Klim is a dehydrated whole milk powder for people of any age to drink in the tropics
where ordinary milk gets spoiled in a short period of time. It survives long in high heat and
humidity even when separated from its containers.
 Nestle Klim is an existing product of Nestle targeting particular customer in some tropics of
Africa and some other countries. Nestle should target new market with their existing product on
the base of geographic segmentation. Geographic segmentation is divided your market audience
to more specific market segment on the basis of countries states, cities, climatic conditions and
so on. This helps in reaching customers everywhere and fulfil their requirement and needs. I
suggest Nestle to target specific customers for this product in the tropic of Pakistan where there
are no other competitors for their product. So, this will give Nestle a competitive advantage and
growth.

2.1 Swot Analysis

It is an organized schedule of the business which includes Internal Strength and Weaknesses and
External Opportunities and Threats to the company.
Purpose of this is to help the manager think about everything that could have an impact on the business.
So, conducting this for Nestle Corporation, it is important for manager to not only cover entire business but
also focus on;
Building Strength (S)
Minimize Weaknesses (W)
Seize Opportunities (O)
Eliminate Threats (T)

2.1a Strengths;
 Nestle is a world-famous brand for food and beverage that has a large global existing market across
over 180 countries. It has different branding for every product at every market segment and also have some
good cosmetic products. Nestle is unmatched with other brands in research and development capabilities as
it spent 1.7 billion on research and development which no other brand has ever done and hence has a
competitive advantage as it also increased revenue by 8.9 billion.
Nestle has a wide product range as it offers over 2000 different products such as Milk and Ice Cream,
Nestle Nutrition, Water Brands, Pet Care, Confectionary products and so on.

2.1b Weaknesses
As a large food and beverages company in the world, it attracts lots of attention.
Unethical Marketing of Baby Formula;
Nestle has been accused of violating ethical marketing codes and operate customers with misleading
nutritional claims about its baby milk formulas which is affecting nestle.
Misleading labelling;
Consumer wants well labelled products and products that are not harmful. Nestle has history of doing this
in some countries and they should improve their practices and should not provide misleading nutritional
information on its labels, hence should provide additional information with it products otherwise it will
affect its brand name.
Maggi controversy in India;
Nestle was being sued in India by the government for $100 over its popular product Maggi noodles for
unfair trading practices which effected Nestle sales in long run.

2.1c Opportunities;
Healthy breakfast;
Maggi, oats and other healthy breakfast are more in use as other heavy breakfast is making people more
health conscious. Nestle should go in much more market penetration with product like this as it will give
them competitive advantage and market growth.
Expanding market;
Nestle can expand market and business by finding new market. As recently nestle launched a boutique
Centre in Thailand and some other countries that is giving opportunity to expand their business. Nestle
should expand this business in Asian countries like India and Pakistan which is big market for boutique.
Strategic Alliance;
Nestle is currently in partnership with Coca-Cola and some other companies thereof creating more and
more opportunities for them to engage more and making them become more powerful in this industry. So,
Nestle should also focus on partnership with other food companies to get further growth in business. For
example: tie up with restaurants, hotel chain, school etc.
Small food starts up;
They will be providing various solutions for food delivery, creating new way of marketing and creating
new ideas to grow and sell the food in today’s markets.

2.1d Threats
Competitors;
Competitive war is one of the key threats affecting the company. Beverages and food industry are always
very competitive, and it consist of many small, large and multi-national companies. Nestle can face
competition at every market segment and for every product. Company such as Uniliver tries to compete
with Nestle at every market segment. So, it is necessary for Nestle to keep an eye on their major
competitors.
Trends;
Nestle should have the ability to anticipate and respond quickly to their major consumer trends and
taste.Every day different product comes to market, some with new features, some with new quality, some
with new package and some with new price, so it is necessary to look at the market and competitors at
every market segment.

2.2 Characteristics of Market Segment

Market segment are a group of people who portion one or more common characteristics combine together
for marketing purpose. It is a successful approach for companies with large market position such as
companies like Nestle operating worldwide. It is because different consumers in different parts of world
have different needs & wants and cultural characteristics. Segmenting market like this can specially target
customers anywhere.
It is also helpful to target different area of population to properly satisfy their requirements.
People in rural area have different choices then in urban so they can focus accordingly and can target them
with their Choices. It also helps the company to identify consumers living in the same region having same
needs and wants. Company can concentrate in that particular region which can enhance brand visibility
much more and can potential customers. And they can expand business furthermore and can increase its
brand reputation and market growth which is best possible in this market segment.

3.0 Marketing Mix of Nestle

Marketing mix is the set of controllable, tactical marketing tools used by a firm to produce the response
wants in a market.
Elements of Marketing Mix (4P’s)
1. Product
2. Price
3. Promotion
4. Place

3.1 Product;
Nestle product in the context of marketing mix are the good and services it offers to its target audience.
Product takes physical form for example like Nestle Klim, Nestle Milk pack, Nestle Nesfriuta etc. Nestle
has differentiated products for their target customers worldwide and has different products in different
categories such as milk and Ice cream, drinks, coffee, breakfast cereals, chocolates, confectionary, and pet
care. Example drinks such as Milo, Mango juices etc.
Nestle major products are very high attribute to its brand name. Nestle Nescafe and Maggi are some
popular products of Nestle. Their products are highly appreciable worldwide for its quality.
It is important for them to make an important variance before selling any product to new market such as
Nestle Klim in Pakistan needs to distinct between core product and actual product, while the core product
of Nestle will be Nestle Klim and actual product is what the customer is looking for and what they want. It
should have these characteristics. Quality level, features, design, brand name, and packaging. Thereby it is
necessary for Nestle to do this before entering new market.

3.2 Price;
Price is the amount of money consumer will pay to buy Nestle Klim and other products and it is the
only element in marketing mix which generates revenue and it determines how much revenue Nestle would
earn from its products and it also sends a message to its target customers. For example, Nestle Nescafe and
Maggi are high quality and well packed products. Nestle has differentiated its products from its
competitors to create value from them. Nestle sets the price for its product based on cost-based pricing and
value-based pricing.
Nestle Klim is entering a new market in tropic of Pakistan where cost of production is less, and people
cannot pay high and they can only pay according to the value and need of product. So, Nestle can use both
of the above-mentioned methods to enter the product in the tropics of Pakistan. Nestle can only charge
high price for this product when the demand is strong related to supply, inelastic and additional features.
Nestle is charging different prices at every market segment for its different products and quality. Here the
price will be dependent on market of individual products.

3.3 Promotion;
Promotion refers to the activities Nestle firm takes to communicate standards of its products to its target
customers. Nestle uses many activities to promote themselves in the particular market segments. Such as;
Advertising – It is making consumer aware of products in hopes of convincing them to buy it. Nestle major
advertisement strategy is to aware consumer about their products, interpret them about product
comparative features and benefits to attract more and more consumer in particular market segment. This
can only be achieved by having good advertising strategy and implementing it in a good way. Like media
channels, direct mails, magazines, newspapers, internet, television and billboards. Nestle launched many
campaigns previously to promote is products such as Nestle Nescafe Tune which pushed Nestle Nescafe up
in the market. Nestle also allow people to come with their own ideas for products which is a good way to
attract consumers. Nestle uses all kinds of media such as Television ads, online ads, Billboards so to
promote it.
This new product Nestle Klim, Nestle should go for heavy promotion as this is a new market for them and
also Nestle would have to keep in mind that chances of its failure are high. Nestle can use different tools
for advertising such as Google Ad Sense and Yahoo Search Marketing to promote this product online.

3.4 Place (Distribution Channel);

It includes all the activities that move a Nestle product from its place of origin to its target customer.
Nestle can sell products either directly to consumer or through intermediaries such as wholesaler and
retailer. Both choices are available for Nestle so it depends on how Nestle believes it target audience
wants. For example, Nestle is targeting people for Nestle Klim in tropic so selling this product online will
be difficult for their consumer to reach in the tropics, so it is necessary for Nestle to use distribution
channels to sell this product. It would make more sales to produce and sell through retail outlets and stores.
Nestle is selling through Intermediaries which pass product to wholesalers who place them in the retail
outlet to be sold. Nestle used variety of affective and efficient distribution mixes and supply chain to
satisfy their customer in a better way and make its product available everywhere such as;

1. Warehouses and distribution centers

2. Fair Price shops
3. Wholesalers
4. Retailers
5. Small Grocery Shops.

3.5 Market Positioning and Competitors

Market positioning refers to the process of creating the image and identity of a brand or product so that
consumer can discover it in certain way. Nestle can create image of this new market in consumers mind by
marketing this with good quality, features, and should be different from its competitors. Nestle currently
positioned themselves as highly reputed brand and it positioning strategy is to create product, service,
channel, people and image differentiation and arrive consumers touch point more efficiently in comparing
with their competitors in this market segment.
Nestle compete in so many market segment and have different competitors for it’s different product. In this
particular market segment Nestle has some close competitors like Kraft foods, Mars, Uniliver, and Heinz.

4.0 Marketing Programs by NESTLE

4.1 Introduction to Market Strategy;

The company began different brands, which are 64 in number and they have accommodated the clients to
give them incredible quality and these are likewise great with its nutritious quality. The organization
likewise kept up its diverse assembling plants in different nations and spread its business to acquire more
income. Presently the nourishment results of this organization are accessible in every single driving
business sector of the world and the general population can discover it and they can utilize it with no
problem. Nestle as turned into the world's best and most broadly conveyed mark by 2010. Nestle is
additionally eager to earn and has an objective to accomplish the $1Billion undertaking by 2014. Nestle
Pure Life is a superior drinking water, created to the most astounding standard of safety and purity. The
organization is trying to give client clean drinking water on appropriate costs make the items helpful as
could be expected under the circumstances. As indicated by their claim that they give the best nourishment
all through the world.
The Strategy of Nestle is for going towards a Transnational strategy such as Low cost, different products,
different Markets, high local responsiveness. The company customizes its products and services such as
delivering goods that are modified to satisfy a specific customer need. 85 percent of the market for instant
coffee in Mexico. 66 percent of the market for powdered milk in the Philippines is provided by Nestle
because of the customers need and Nestle delivers as it says.

4.2 New Marketing Program;

Since Nestle has an increased brand image in the world, it shows us that the marketing programs of
Nestle has been successful throughout. Advertising is the most effective way of introducing a new product
in the new market. Other than that, Nestle also offer sports-based sponsorships to athletes, teams and for
events. As Nestle has healthy and nutritious products, it will attract such event dealers interested in
sponsorship from Nestle hence creating a huge image and will reach a large amount of audience as well.
Nestle food products such as cereals can have special promotions such as discounts, customer loyalty cards
and even buy one get one free offers to attract parents and create a target market.
market positioning of Nestle.

4.3 Proposition for Future Marketing Program Development;

Nestle has achieved its utmost goal of maximum profits and is moving towards expanding its business
in different sectors throughout the world.
Firstly, we suggest making customers happy and satisfied at the same time, the company along with new
products and great service, should go along with promotions and campaigns to support the general public.
For example, going to hospitals and treating the patients with free juices and even samples of new products
to promote it. This will create an awareness for the public which would create a positive image of the
company and future sales will be guaranteed.
Secondly, Nestle has been starting to make sponsorship agreements like with the IAAF (International
Association of Athletics Federations) which is a very big step to promote the brand. Sponsoring big events
which take place once or twice a year would also help the company promote its image and the company
will take a step forward in promoting itself.
Lastly, in order to achieve something big, small things must be taken into consideration. We suggest
advertising the products which Nestle has on a smaller scale and even use a lower budget on it such as,
using TV commercials, distributing Pamphlets, advertise online and use billboards.
To conclude, we believe with all of the above suggestions, Nestle would be better at its Marketing Program
and thus would help them reach the overall objective of Profit Maximization.

5.0 REFERENCES

https://www.nestle.com/aboutus/history/nestle-company-history

https://www.nestle.co.za/aboutus/missionvision

Published on Jan
13, 2016
https://www.slideshare.net/BabaChaudhry/marketing-strategy-of-nestle-ppt

Introduction to management by John R Schermerhorn -2010

Ovidijus Jurevicius | January 7, 2017

https://www.strategicmanagementinsight.com/swot-analyses/nestle-swot-analysis.html

January 13, 2018 By Hitesh Bhasin

https://www.marketing91.com/swot-analysis-of-nestle/

August 3, 2017 by Faizul

http://www.gotabout.info/swot-analysis-of-nestle/

https://www.mbaskool.com/brandguide/food-and-beverages/3227-nestle-ltd.html

January 7, 2018 By Hitesh Bhasin

https://www.marketing91.com/marketing-mix-nestle/

https://www.mbaskool.com/marketing-mix/products/16825-nestle.html

Published on Jan
13, 2016
https://www.slideshare.net/BabaChaudhry/marketing-strategy-of-nestle-ppt

December 17, 2017 By Hitesh Bhasin

https://www.marketing91.com/marketing-strategy-nestle/

https://www.mbaskool.com/brandguide/food-and-beverages/3227-nestle-ltd.html
Entrepreneurship – Successfully Launching new Ventures
By: Bruce R Barringer and R Duane Ireland published and posted it 2008

GROUP TASK REPORT

Intake: UC1F1802IBM

Group Members:

1) Istafa Jafri [TP049047]

2) Hamza Nawaz [TP048985]

3) Mehmood Khan [TP049025]

4) Janshad Palollathil [TP047713]

Area of Responsibility Name and Signature of Member

Introduction Hamza Nawaz

Market Segmentation Mehmood Khan

Marketing Mix of Nestle Janshad Palollathil

Marketing Programs by Nestle Istafa Jafri