Marketing Fruit Yogurt Edit 14-1-14

8/9/2019 Marketing Fruit Yogurt Edit 14-1-14

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NEW PRODUCT DEVELOPMENT Nestlé Fruit Yogurt’s

Vision Statement of Nestlé

The strategic priorities of Nestlé are focused on delivering shareholder value through the

achievement of sustainable, capital efficient and profitable long term growth.

Improvements in profitability will be achieved while respecting quality and safety

standards at all times.

In line with this obective, Nestlé envisions to grow in the shortest possible time into the

number one food company in !a"istan with the unique ability to meet the needs ofconsumers of every age group # from infancy to old age, for nutrition and pleasure,

through development of a large variety of food categories of the highest quality.

Nestlé envisions the company to develop an e$tremely motivated and professionally

trained wor" force, which would drive growth through innovation and renovation.

It aspires, as a respected corporate citi%en, to continue playing a significant role in the

social and environmental sectors of the country.

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&rief Introduction of Nestlé

In the '()*s +enri Nestlé, a pharmacist, developed a food for babies who were unable to

breastfeed. +is first success was a premature infant who could not tolerate his mothers

mil" or any of the usual substitutes. !eople quic"ly recogni%ed the value of the new

product, after Nestlés new formula saved the childs life, and soon, -arine actée +enri

Nestlé was being sold in much of /urope.

&y the early '0**s, the company was operating factories in the 1nited States, &ritain,

2ermany and Spain. 3orld 3ar I created new demand for dairy products in the form of

government contracts. &y the end of the war, Nestlés production had more than doubled.

The '04*s saw Nestlés first e$pansion into new products, with chocolate the 5ompanys

second most important activity

Nestlé felt the effects of 3orld 3ar II immediately. !rofits dropped from 64* million in

'07( to 6) million in '070. Ironically, the war helped with the introduction of the

5ompanys newest product, Nescafé, which was a staple drin" of the 1S military. Nestlés

production and sales rose in the wartime economy.

Nestlé with headquarters in Vevey, Swit%erland was founded in '()) by +enri Nestlé and

is today the worlds biggest food and beverage company. They employ around 48*,***

people and have factories or operations in almost every country in the world.

Nestlé !a"istan currently has '08( employees and has a mar"et capitali%ation of

9',4)(,'7),***.

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Introduction to Nestlé -ruit :ogurt

Nestlé is committed to offering consumers high#quality food products that are safe, tasty

and affordable. The Nestlé Seal of 2uarantee is a symbol of this commitment. ;eeping

this in mind, Nestlé developed a unique healthy product which is a substitute to sugary

un" food li"e carbonated drin"s, ice#creams and desserts.

Nestlé -ruit :ogurt, a value added product, is categori%ed as a chilled dairy product

which has all the goodness of mil", yogurt and fruit. Such products need to be

refrigerated between temperatures of * < 9 degrees from manufacturing till it reaches the

consumers because they contain live bacteria. Nestlé -ruit :ogurt has a shelf life of 4(

days.

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Marketing Ethis an! "oial Res#onsi$ilities

;eeping in mind !a"istan=s social responsibilities and mar"eting ethics, Nestlé adopts the

following practices in its production of Nestlé -ruit :ogurt.

• >uality of the product is maintained by foreign quality control supervisors on a

random wee"ly basis.

• The product is produced using all +alal foods.

• !roduct wastes are properly treated.

• 3or"ers, especially those involved in the production process, are provided with

specially designed clothing?suits.

• The price of the product is "ept low.

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Nestlé -ruit :ogurt=s 5urrent @ar"eting @i$

The mar"eting mi$ comprises of the 9 !s namelyA !roduct, !lace, !rice and !romotion.

-ollowing is a detailed study of the contents of Nestlé -ruit :ogurt=s mar"eting mi$.

%& Pro!ut

!roducts are need#satisfying products of an organi%ation. The idea of a product as

potential customer satisfaction or benefit is very important.

Nestlé -ruit :ogurt is a new product in Nestlé=s product line in !a"istan.

Branding &randing is the use of a name, term, symbol or design or a combination of these to

identify a product.

The fruit :ogurt has well "nown brand name Nestlé which has gain popularity over years

and is "nown for offering healthy nutritious food items.

Advantages of Branding

a' (!enti)iation

&randing has helped Nestlé -ruit :ogurt gain a distinctive identification and has

presented an ease of gaining customers. @ost people prefer trying fruit yogurt of

familiar trusted brand rather than of the brands they haven=t heard of before. It has

also helped reduce the costs for designing and implementing programs for promoting

the product.

$' *ran! Fa+iliarit,

&rand familiarity refers to how well customers recogni%e and accept a company=s

brand.

Nestlé has earned brand acceptance with high quality products and their regular

promotion and its high degree of brand familiarity affects the planning of the

remainder of the mar"eting mi$. Therefore Nestlé -ruit :ogurt is placed in all super

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mar"ets and general stores of !a"istani mar"et and doesn=t require e$tensive

promotion because of its already built brand familiarity.

' *ran! e-uit,

Since brand equity refers to the value of brand=s overall position in mar"et we can

safely say that Nestlé has higher brand equity on the basis of its satisfied customers

and eagerness of customers to have it in stoc".

Manu)aturer *ran!

Nestlé is a manufacturer brand Bnational brandC i#e it is created by producers and is

promoted throughout the !a"istani mar"et in addition to mar"ets of other countries.

Pakaging

!ac"aging concerns with designing and producing the container or wrapper for a product.

Nestlé -ruit :ogurt comes in an attractive and convenient to use pac"age and serves the

following purposes of pac"agingA

• Protects the contents on their way to consumer: Its pac"age id well designed so

as to protect it during shipment and prevents tampering with it in the warehouse

or retail stores.

• Protects the product after purchase: Nestlé -ruit :ogurt is convenient to use,

cleaner and less susceptible to losses from spilling and spoilage because of its

good quality pac"aging.

• Packaging acceptable to middlemen: !ac"aging is acceptable to middlemen

because it is suitable for displaying and stac"ing in stores.

• Helps persuade the consumers to buy the product: !ac"aging is attractive and

colorful with the illustrations of fruits and creamy delicious yogurt which

persuades the customers to taste it.

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Labeling D label is a part of a product which carries information about the product and the seller. D

label may be a part of the pac"age or a separate tag attached to the product. Types of

labels includeA

• D brand label

• D descriptive label

• D grade label

Nestlé -ruit :ogurt employs descriptive labeling which is a part of its pac"age. It carries

information about ingredients, nutritional contents, products weight, and the fruit flavor.

Product quality and customer needs>uality is the ability of a product to satisfy a customer=s needs or requirements. Since

consumers mainly require satisfaction, mar"eting managers must be constantly concerned

with product quality.

Therefore, Nestlé is committed to offering consumers high#quality food products that are

safe, tasty and affordable to cater to the customer satisfaction aspect. The Nestlé Seal of2uarantee is a symbol of this commitment. ;eeping this in mind, Nestlé developed a

unique healthy product which is a substitute to sugary un" food li"e carbonated drin"s,

ice#creams and desserts.

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Promotion!romotion is one of the maor tools used in mar"eting and an essential part of the

mar"eting mi$ of an organi%ation. @ar"eters usually use promotion to inform the public

of their product and communicate with customers with respect to product offerings.

!romotion is also however used to influence the mar"eters target mar"et usually viaA

• Ddvertisements and commercials through interpellation

• Streamers

• Eutdoor billboards

• @aga%ines newspapers and posters

• !ersonal selling

• Sales promotion

• !ublic relations etc

!romoting their product as better then any other similar products or by changing views,

awareness, beliefs, and feelings of perspective customers.

Promotional roles

Three essential promotional roles are given belowA

• Informing

• !ersuading

• Dnd reminding target audiences

Nestlé -ruit :ogurt is a new product in Nestlé=s product line in !a"istan. The product=s

present mar"et constitutes all the citi%ens that consume yogurt. Nestlé -ruit :ogurt=s

production began in the second quarter of 4**8 but due to very limited budget and the

product being an entirely new concept to the e$isting mar"et, a discrete analysis of all the

entities that would affect the new product were ta"en into consideration. Ds the product

was new, mar"eters immediately felt the need of informing the people about it. !roviding

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Information is the first and the foremost tas" of promotion because people need to "now

about the e$istence of a product, its benefits, usage and wor"ing. The most useful product

will be a failure if no one "nows it e$ists. -or the promotion of Nestlé -ruit :ogurt

analysis of the scenario was conducted. It revealed that in 4**9 there ware 48* brands

being advertised on TVF by the start of 4**8 the number had doubled and before the

launch of Nestlé -ruit :ogurt it reached to about 8** brands. &ecause of the flooding of

television with advertisements, company decided to promote the product distinctively and

differently usingA streamers, posters, maga%ines, and outdoor billboards as the mar"eting

mediums. The common observation is that the more the people get to see various

advertisements on T.V the less they pay heed to them. Its human nature to get fed up or

become indifferent to things that go beyond limit I#e the flood of advertisements coming

up everyday. To promote fruit yogurt through means other than mass media was a very

wise decision on the part of the management of Nestlé. If Nestlé=s fruit yogurt had been

advertised on T.V, it would have been forgotten or lost its charm very soon.

Dnother purpose of promotion is persuading. Intense competition among firms in mar"et

provides people with many alternative products for satisfying even basic physiological

needs. Ds a result, persuasive promotion becomes essential. Nestlé, "eeping this into

mind, have made billboards, streamers, advertisement and maga%ines captivating and

attractive enough to play upon the wea"nesses of fruit, dessert lovers and diet conscious

people who were since long loo"ing for some healthy and hygienic alternative to un"

food.

ast but not the least is reminding the mar"et of the product=s availability and its

potential to satisfy. This is done by bombarding the target mar"et with messages, symbols

etc which have the ability not only to retain but also to attract new customers. !reviously

Nestlé=s message regarding their fruit yogurt was Gfruit yogurt with real fruit chun"sH

which later on changed to Gimagine the tasteH. So we conclude that Nestlé=s current

message of Gimagines the tasteH and delicious cup of fruit yogurt serves both persuasive

and reminding roles of promotion.

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The message of estl!"s fruit yogurt

BThis message helps reminding the target mar"et of fruit yogurtC

The captivating fruit yogurt of estl!

B!ersuades the mar"et to buy this productC

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.& Plae

aw yogurt, which is one of the competitors of fruit yogurt, has been into mar"et since

long. It is not only cheap but also available in quantities of one=s choice Bmore or lessC.

@anagement of Nestlé -ruit :ogurt correctly figured out that the perception of rawyogurt of one particular class of !a"istan is hard to change. They "new that introduction

of fruit yogurt, which is of S.'4, delicious, hygienic and nutritious, among low#income

group and low socio#economic status will not be a wise decision, as they won=t readily

accept it. They also correctly udged that less "nowledgeable and illiterate people will

resist switching from raw to fruit yogurt because they are either less aware or indifferent

to the hygienic factor and nutritive values of food. They willingly compromise on quality

for price and some among them, without striving to get information, perceive the Nestlé=s

fruit yogurt to be of high price and do not buy it ultimately. ;eeping these attitudes and

behaviors of different classes in mind, Nestlé decided to start off from the safe side I#e

they introduced their fruit yogurt in Islamabad, ahore, ;arachi and !eshawar. These

cities of !a"istan are thic"ly populated and have relatively high awareness and literacy

rate. 3e can safely say that this product is targeting GDH class of our country and became

popular among them because of the following characteristics of this classA

• GDH class people are mostly literate, "nowledgeable, have awareness and the

resources to try out every new food item that comes into the mar"et.

• They are much aware of the nutritive values of food and "now the advantage or

edge of fruit yogurt over the raw one.

• They don=t usually compromise on quality, hygiene and delicacy for price.

• This amalgamation of flavored yogurt with fruit chun"s came as good news for

fruit lovers.

• It became popular among teenagers of this class because it is a healthy alternative

un" food etc

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/& Prie

The ultimate aim of any organi%ation is to set a price that satisfies both the consumers

and the manufacturers.

Nestlé -ruit :ogurt comes in a small si%ed pac" of '4 upees which is affordable to

every socioeconomic status. The competitors of Nestlé -ruit :ogurt includeA

• Elpers

• !rime yogurt

• J aw yogurt mainly

In order to outweigh the competition of raw yogurt which is very cheap and a preference

of price#conscious people, Nestlé -ruit :ogurt comes in a small pac" which is reasonably

priced "eeping in consideration its fruit#contents which ma"e it nutritious and tasty. This

has been achieved by wor"ing on price strategy which starts by reducing the production

costs so as to reduce the sales costs.

ow price feature of the product targets the lower and middle classes too. It is now

commonly used as a substitute to mashed foods for "ids and also to un" sugary foods

and as a dessert, all because it combines the benefits of taste, quality and low price and is

gaining popularity due to these multiple features.

Price Level Policies over Product Life #ycle

!rice level policies vary according to the life cycle stage product is in at any given time.

Therefore pricing policies are different in introductory, growth, maturity and decline

stage. Since Nestlé -ruit :ogurt is in introductory stage we discuss the pricing policies of

introductory stage as underA

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$ntroductory stage

!ricing strategies used at introductory stage or mar"et entering price strategies areA

•S"imming

• !enetration

In preparing to enter the mar"et with a new product, management decides whether to

adopt a s"imming or a penetration price strategy.

%arket&'kimming Pricing

S"imming defines the pricing strategy of entering mar"et at a high price with high quality

products. This strategy is applied in case of less elastic or inelastic demand of products.

%arket&Penetration Pricing

This strategy involves introduction of products at low prices. This strategy is applied in

case of products with more elastic demand and particularly for consumer goods.

estl! (ruit )ogurt: %arket&Penetration Pricing

The pricing strategy adopted by Nestlé -ruit :ogurt is mar"et#penetration pricing since it

is a consumer product and has entered mar"et with price as low as s. '4 and also

because it fulfills following conditions of mar"et#penetration pricing.

• D large mar"et e$ists for the product.

• Kemand is highly elastic.

• /conomies of scale are possible i#e substantial reductions in the unit cost of the

product can be achieved through large#scale operations.

• 5ompetition for this product already e$ists in mar"et i#e aw yogurt which

presents a fierce competition.

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Price *b+ective

/very mar"eting activity including pricing should be directed towards a goal. Thus

management should decide on its pricing obective before determining the price itself.

Nestlé li"e a few other firms has consciously established a pricing obective for fruit

yogurt. -ollowing are the common pricing obectivesA

• !rofit#orientedA

To achieve a target return

To ma$imi%e profit

• Sales#orientedA

To increase sales volume

To maintain or increase mar"et share

• Status quo#orientedA

To stabili%e prices

To meet competition

estl! price ob+ective: 'tatus&quo oriented

The pricing obective ta"en up by Nestlé -ruit :ogurt is status quo which is intended

simply to maintain the firm=s current situation that is the status quo. 3ith either of the

goals of this obective a firm see"s to avoid price competition. Prie sta$ili0ation is

often the goal in industries where one large firm such as Nestlé acts as a leader in setting

prices. Smaller industries tend to Gfollow the leaderH when setting their prices or simply

price the products to meet the prevailing mar"et price. This pricing policy gives

management an easy means of avoiding difficult pricing decisions.

Nestlé also adopts this strategy to avoid #rie o+#etition. It focuses more on using

other mar"eting mi$ elements such as product distribution and product rather than price.

Nestlé -ruit :ogurt is concentrating more on innovation that is introducing new flavors

and previously introduction of real fruit chun"s rather than changing prices.

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Nestlé -ruit :ogurt=s @acro environment

Nestlé= -ruit :ogurt=s /$ternal @acroenvironment includesA

%& De+ogra#his

a, Age

&riefly, we can say that fruit yogurt is popular among every age group. This is

because it=s delicious, nutritious, hygienic and the best alternative un" food. !eople

for a long time were loo"ing for one such yogurt that is energi%ing, creamy, thic", and

full of fruits. Ence this product came, it too" the !a"istani mar"et by storm. &ecause

of its low fat contents it came as good news for the diet conscious people. @others

and wives, who have always been the most considerate for their "ids and families,

preferred to buy fruit yogurt as it is of high quality and distinct taste. It has loads of

flavors suited to the taste of almost every member of the society. !reviously it was

ta"en with meals only but now it has become an all time favorite dessert as well.

b, 'e-.gender It has been a common observation that men have never been much into eating yogurts

but with the launch of this product scenario changed. @en who used to be most

reluctant to eat yogurt, enoy this product as much as they can. So we can safely say

that fruit yogurt is popular among men and women ali"e.

c, Location of residence Nestlé -ruit :ogurt is not available everywhere right now. It has been first introduced

in ;arachi, ahore, Islamabad and !eshawar where education and awareness level is

relatively high and people willingly go for the hygienic, nutritious and high quality products irrespective of their prices.

d, 'ocioeconomic status!reviously, people used to prefer "hula yogurt. The reason was that it used to be

cheap, available in large quantities and worth a compromise on quality for price. To

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target such people, Nestlé came up with a '4 rupees economical fruit yogurt which is

within the affordability of every income group of !a"istan. 3ith this introduction low

income people switched to fruit yogurt as it provided them with high quality,

nutrition, and delicacy at a very reasonable price.

e, /eligion3ith religion comes the concept of +alal, +aram products primarily. If you ta"e a

loo" at the above#mentioned ingredients of fruit yogurt .you=d "now that they are all

+alal according to our religion LIslam=. This is because one of the foremost strategies

of Nestlé -ruit :ogurt is to ta"e well into consideration the country=s legislatures and

religious constraints of the country before the introduction of a product. In addition to

this, fruit yogurts of Nestlé are of high quality, they are nutritious and hygienic as

well.

f, 0ducation/ducation and "nowledge bestow a person with awareness which actually effects the

buying decisions of individuals. Enly the educated people "now the importance of

nutritious and hygienic foods and such people never compromise on quality for price.

They prefer to buy e$pensive products but in return e$pect the highest possiblequality n wide variety. ;eeping this aspect into consideration, Nestlé launched its

fruit yogurt initially in ;arachi, Islamabad, ahore and !eshawar where the literacy

rate is relatively high and people have the urge to "now more and beware of their

surroundings.

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.& Eono+is Con!itions

The economic conditions prevalent in the country did affect the investment in the

Nestlé -ruit :ogurt industry.

Some common restrictions and barriers that prevented the investment of capital in this

proect includedA

a, *perations /estrictionsestrictions on procurement, hiring foreign personnel, or locating business activities,

as well as the efficiency and honesty of officials with whom business e$ecutives must

deal and the effectiveness and integrity of the udicial system. To deal with problems

li"e these Nestlé -ruit :ogurt=s board of directors lessened the use of the middle#man

and did most of the sale by their own department.

b, Labor Policies2overnment policies, trade union activity, and productivity of the labor force that

create either high or low costs for businesses. Dpart from this Nestlé -ruit :ogurt

team discourages the use of child labor in its plants. This comes at a cost. The labor

e$penses for the company raised more than forecasted.

c, 1omestic 0conomic ProblemsD countrys ran"ing according to its most recent five#year performance record in per

capita 2K!, 2K! growth, inflation, unemployment, capital investment, and budget

balance. Kuring the year 4**8#*) the country did e$perience inflation, a low 2K!

and unemployment all these factors contributed in a low investment by the investors

into this fruit yogurt proect Nestlé -ruit :ogurt used the process of strategic planning. Strategic planning involves

identifying future trends and analy%ing how the corporation can ta"e advantage of

those trends. Such analysis traditionally concentrated heavily on economic trends, but

since political decisions and events substantially influence these trends, planners now

incorporate political ris" analysis. 5urrent planning activities made by Nestlé involve

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an attempt to assess the impact of political and economic trends, but strategic

planners can find it difficult to incorporate political analysis into their traditional

economic and business research. !olitical analysis, by its nature, is qualitative,

dealing with more abrupt and sweeping factors. @any planners have found systematic

ris" ratings particularly useful because they allow for the cross country comparisons

that are an integral part of their analytical approach. @ost firms use ris" information

for many reasons and in several different offices.

Dnother important reason for the low investment of capital in the Nestlé -ruit :ogurt

proect was the increased interest rates. -ewer investments were made which created

a need for capital. This affected the company=s mar"eting strategy and the number of

advertisements made was decreased.

/& Co+#etition

Nestlé -ruit :ogurt has three main competitors namelyA

%& Elpers

.& !rime :ogurt

/& aw :ogurt

#ompetitive strategies of estl!

In order to counter the present competition, Nestlé= -ruit :ogurt=s mar"eting team

adopts the following measuresA

• Innovations in their products ByogurtsC so that the mar"et never gets fed up.

• -ruit yogurt of high quality and a distinct taste.

• ow fat contents to target the diet#conscious section of the mar"et.

• ow price of '4 rupees that is affordable to every socioeconomic status.

• Nutritious, hygienic and the best alternative to un" food.

• Dttractive pac"aging and use of imported seals.

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• +igh budget, advertisement of this new product Bfruit yogurtC on mass

media.

• Ddvertisement through streamers, posters, maga%ines and outdoor

billboards.

• Kifferent fruit flavors in the yogurt that specifically attract "ids and fruit

lovers.

1& "oial an! Cultural Fores

-irst of all, we have to define what society is. Society is all about people in general,

living in communities. Then we have to "now what culture is. 5ulture is basically the

customs, beliefs, way of life, and social organi%ation of a particular country or group.

Now we have to see how and in what ways the cultural and social forces affect the

mar"eting of our chosen organi%ation, GNestléH in !a"istan. The first aspect that will

be brought under consideration isA

a' Fa+il,

In a country li"e !a"istan, family plays a pivotal role in the everyday life of anindividual. 3here there is a family, there is food, and where there is food there are

accessories e.g. raita, pic"les, salad, pac"ed or raw yogurt. This is a part of our

culture. Nestlé provides the families with the dairy products li"e pac"ed simple

yogurt, raita, and fruit yogurt. &esides having it as an accessory of food, simple

yogurt is also used as a raw material for coo"ing, which is again a part of our

tradition, our culture. Nestlé provides the !a"istani families with all that they require

purity, taste, hygiene everything.

$' Custo+s an! *eha2iors

The normal custom is that this particular product is usually consumed in the summers.

Ds previously mentioned, the country runs on traditions and culture, and it tells us

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that it gives the body a cool effectF therefore, people prefer having yogurt in the

summers.

+ere in !a"istan, the maority of the people are either illiterate or live below the line

of poverty, so how this GedibleH product is pac"aged does not really matter as it has to

be consumed anyway.

The behavior of the customers changes at certain points in a year where the demand

of this particular product increases e.g. @oharram, amadan, /id etc.

3& Politial an! Legal Fores

!olitical and legal forces also influence every company=s conduct. !olitical and legal

forces on mar"eting would be categori%ed intoA

a' Tra!e #oli,

Ta4es Bstate and local ta$esC < delivery services result in higher ta$es due to increase

in number of vans since Nestlé mostly relies on its self service for transportation so

that the chilling capacity and other such requirements can be observed. Increase in

vans for transportation is thus an uncontrollable factor and demands ta$ payments.

5uotas an! tari))s < when importing seals Nestlé also faces import barriers in the

form of quotas and tariffs which also limit the imports.

$' 5ualit, Control

Since Nestlé is an ever increasing food company quality control also presents a

problem which has to be observed. Nestlé @il" related products have established an/$tension Service, staffed by qualified veterinary doctors, who assist farmers in

vaccination and treatment of livestoc", improved breeding, good animal husbandry

practices, provision of high yield fodder seed etc so as to come up with highest

quality food products.

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' O#en6lose eono+,7

It=s an open economy facilitating foreign investments and allowing free trade.

8& Tehnolog, Nestlé, the worlds biggest food 2roup is also the global leader in the industry with

regard to esearch and Kevelopment BJKC, No other food company dedicates so

many human and financial resources to JKA an international staff of 78** engaged

in the search for innovative new products and the renovation of e$isting ones. :ear

after year, Nestlé invests some (** million Swiss francs into JK as a maor driving

force of its double strategyA to strengthen the 5ompany=s brands worldwide and to

continue to support future long# term growth and competitiveness through innovation

and renovation. Dt the threshold of this new millennium, Nestlé -ruit :ogurt=s

obective is to consolidate and strengthen its leading position at the cutting edge of

innovation in the food area, in order to meet the needs and desires of consumers

around the world, for pleasure, convenience, health and well being.

Nestlé -ruit :ogurt#processing industry has special concerns about the health and

safety of the consumers. This is the reason why abundant and productive agricultural

sources, conducive climate conditions, and modern technologies are all important

factors for providing Nestlé -ruit :ogurt#processing industry with ample and high

quality raw materials. -or the most part, Nestlé food#processing facilities are located

close to their agricultural source.

Nestlé uses the term Mclean technologiesM to describe its wor"ing environment. This

term is defined as Mmanufacturing processes or product technologies that reduce

pollution or waste, energy use, or material use in comparison to the technologies thatthey replace.M

Nestlé -ruit :ogurt is @ass#processed by heating concentrated mil", or mil" fortified

by s"im mil" powder, to about 0* 5 B'09 -C for a few minutes, then cooling it to

about 99 5 B''' -C, at which point a controlled culture of Lactobacillus bulgaricus

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and Streptococcus thermophilus is added. These two lactic organisms produce the

required acidity and the delicate yogurt flavor. Souring and thic"ening ta"e place in

about 7 hours at 99 5 B''' -C, and stop when the mi$ture is cooled to 8 5

B9* -C.Dt this stage chun"s of fruit are added to give the yogurt the desired taste.

&ecause the mil" has been heated and soured, and due of its high acidity, pathogens

cannot grow in yogurt, and it is probably the safest of all perishable foods. 3ell#made

yogurt made by Nestlé industries of any type should last for '9 days if "ept at 8 5

B9' -C.

$mproved Packaging

Nestlé=s fruit yogurt=s main aim is the use of less e$cessive and more environmentallyfriendly pac"aging products. It uses special pac"aging techniques that minimi%es and

eliminates loss by lea"age or evaporation and reduces spoilage and contamination by

dirt, insects, bacteria, mold, moisture or o$ygen.

Dnother important technique used in the pac"aging of Nestlé -ruit :ogurt is that of

Dseptic pac"aging. Dseptic pac"aging sterili%es the fruit yogurt and then pac"ages it

in a sterili%ed container. The typical aseptic containers include foil#lined cartons,

plastic cups, and plastic bags. These containers cost and weigh less than the metal

cans or glass bottles traditionally used in pac"aging. Dnother advantage of aseptic

pac"aging is better flavor. 5ans or bottles require much longer heating time for

sterili%ation. The longer foods are heated, the more the flavor changes. In the aseptic

process, foods can be heated rapidly outside of the container. Therefore, aseptically

pac"aged foods have a more natural flavor as well as more nutrients.

Dbove everything to "eep up with the quality standards Nestlé used imported seals

specially designed for pac"aging dairy products. Dll this ma"es Nestlé -ruit :ogurt a

flavored product with only a few calories per serving and is popular for low calories

diets.

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Nestlé -ruit :ogurt=s @icroenvironment

%& Market

In mar"eting, the term mar"et refers to the group of consumers or organi%ations that

is interested in the product, has the resources to purchase the product, and is permitted

by the law and other regulations to acquire the product.

In mar"eting any given good or service, three specific factors need to be consideredA

• !eople or organi%ations with needs,

• Their purchasing power, and

• Their buying behavior

Nestlé -ruit :ogurt is an indulger for all males, females and adults who are health

conscious people and who want healthy alternative to un" food but with good taste.

This product is unvaryingly for all fruit#lovers and fans of desserts. +owever the main

target mar"et of this product is not only "ids, who are appealed to a variety of fruit

flavored yogurts with real fruit chun"s i.e. !each, Strawberry, !ineapple etc because

of their delicious tastes, but are also a choice of mothers because they are safe and

because of their nutritive values.

&riefly Nestlé -ruit :ogurt has a wide range mar"et including all age groups and

income groups with price s.'4 per yogurt.

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.& "u##liers

The people or firms that supply the goods or services required by a producer to ma"e

what it sells and also the firms that provide the merchandise, a wholesaler or retailer

resells are the suppliers and are a vital part of a firm=s mar"eting success.

The core raw materials of Nestlé -ruit :ogurts are mil" and fruits. Kriven by its

commitment to quality and having reali%ed that only self collection could eliminate its

dependence on poor quality mil" from outside sources, the company successfully

established its own collection system and e$panded its operations over a very large

mil" shed area in !unab. @il" is collected through a vast networ" of village mil"

centers BV@5sC, sub#centers and centers. Dt these centers chillers have been installed

to lower mil" temperature to 9 degree centigrade for preventing bacteria development

during long hauls to factories, which are underta"en by a fleet of specially insulated

tan"s.

Initially Nestlé @il"pa" ltd. Dcquired services of ;abirwala Kairy ltd. &ut now with

the merger of this factory with Nestlé @il"pa" in Dpril '00O, ;abirwala factory is a

fully owned unit of Nestlé @il"pa" ltd.

/& Marketing (nter+e!iaries

@ar"eting intermediaries are independent business organi%ations that directly aid in

the flow of goods and services between a mar"eting organi%ation and its mar"ets.

There are two types of intermediariesA

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a' Mi!!le+en9 :holesalers an! retailers

Ds for Nestlé -ruit :ogurt wholesalers are given license Bi.e. those with best

chillersC.+owever middlemen are less involved because it mostly done by their self

owned departments.

$' Channels o) !istri$ution

They operate between a company and its mar"ets and between a company and its

suppliers. These are the facilitating organi%ations that provide services such as

transportation, warehousing, and financing that are needed to complete e$changes

between buyers and sellers.

@il" collected by Nestlé is low on Sodium high on fat and solid#non#fats and has

reduced bacteria count. This was achieved through a comprehensive strategy and

sustained efforts to overhaul the mil" collection process, intensive education program

for the farmers and the mil" collection staff, up gradation of mil" loading and

transportation system, increase in the chilling capacity and above all, adherence to the

highest acceptance standards at all mil" collection points, including the factories.

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Segmentation

@ar"et segmentation is one of the steps that go into defining and targeting specific

mar"ets. It is the process of dividing a mar"et into a distinct group of buyers that require

different products or mar"eting mi$es.

D "ey factor to success in todays mar"et place is finding subtle differences to give a

business the mar"eting edge. &usinesses that target specialty mar"ets will promote its

products and services more effectively than a business aiming at the MaverageM customer.

Epportunities in mar"eting increase when segmented groups of clients and customers

with varying needs and wants are recogni%ed. @ar"ets can be segmented or targeted

using a variety of factor. The bases for segmenting consumer mar"ets includeA

• Kemographical bases Bage, family si%e, life cycle, occupationC

• 2eographical bases Bstates, regions, countriesC

• &ehavior bases Bproduct "nowledge, usage, attitudes, responsesC

• !sychographic bases Blifestyle, values, personalityC

D business must analy%e the needs and wants of different mar"et segments before

determining their own niche. To be effective in mar"et segmentation "eep the following

things in mindA

• Segments or target mar"ets should be accessible to the business

• /ach segmented group must be large enough to provide a solid customer base.

• /ach segmented group requires a separate mar"eting plan.

arge companies such as Nestlé segment their mar"ets by conducting e$tensive mar"et

research proects. This research is often too e$pensive for small businesses to invest in,

but there are alternative ways for to a small business to segment their mar"ets.

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There are many reasons for dividing a mar"eting into smaller segments. Dny time one

suspect there are significant, measurable differences in the mar"et he?she should consider

mar"et segmentation.

Market seg+entation is the process in mar"eting of dividing a mar"et into distinct

subsets BsegmentsC that behave in the same way or have similar needs. &ecause each

segment is fairly homogeneous in their needs and attitudes, they are li"ely to respond

similarly to a given mar"eting strategy. That is, they are li"ely to have similar feeling and

ideas about a mar"eting mi$ comprised of a given product or service, sold at a given

price, distributed in a certain way, and promoted in a certain way.

Small segments are often termed niche mar"ets or specialty mar"ets.

The process of segmentation is distinct from targeting Bchosing which segments to

addressC and positioning Bdesigning an appropriate mar"eting mi$ for each segmentC. The

overall intent is to identify groups of similar customers and potential customersF to

prioritise the groups to addressF to understand their behaviourF and to respond with

appropriate mar"eting strategies that satisfy the different preferences of each chosen

segment.

The re-uire+ents )or suess)ul seg+entation are7

• +omogeneity within the segment

• +eterogeneity between segments

• Segments are measurable and identifiable

• Segments are accessible and actionable

• Segment is large enough to be profitable

These criteria can be summari%ed by the word SDKD@A

• S # SubstantialA the segment has to be large and profitable enough

• D # DccessibleA it must be possible to reach it efficiently

• K # KifferentialA it must respond differently to a different mar"eting mi$

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• D # DctionableA you must have a product for this segment

• @ # @easurableA si%e and purchasing power can be measured

5urrently a college student studying the mar"eting mi$ is now introduced to the -our !sof the @ar"eting @i$F !roduct, !lace, !romotion, !rice. !roduct BserviceC is whatever it

may be that is being sold?mar"eted. !rice refers to not only the actual price but also price

elasticity. !lace has evidently replaced distribution simply by where or what area the

mar"eting campaign is going to cover. Today the idea of place is not limited to

geographic profiling but also demographics and other categori%ing variables. This has

only occurred over the last ten years with the e$pansion of internet use and its ability to

target specific types of people and not ust people in a geographic area. !romotion simply

refers to what medium will deliver the message and what the overall mar"eting strategy is

offering as a benefit.

The 2aria$les use! )or seg+entation inlu!e7

• 2eographic variables

o region of the world or country

o country si%e

o climate

• Kemographic variables

o age

o gender

o se$ual orientation

o family si%e

o family life cycleo income

o occupation

o education

o socioeconomic status

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o religion

o nationality?race

• !sychographic variables

o personality

o life style

o value

o attitude

• &ehavioral variables

o benefit sought

o product usage rate

o brand loyalty

o product end use

o readiness#to#buy stage

o decision ma"ing unit

3hen numerous variables are combined to give an in#depth understanding of a segment,

this is referred to as !e#th seg+entation. 3hen enough information is combined to

create a clear picture of a typical member of a segment, this is referred to as a $u,er

#ro)ile. 3hen the profile is limited to demographic variables it is called a demographic

profile Btypically shortened to Ma demographicMC. D statistical technique commonly used

in determining a profile is cluster analysis.

The most successful small businesses understand that only a limited number of people

will buy their product or service. The tas" then becomes determining, as closely as possible, e$actly who those people are, and targeting the businesss mar"eting efforts and

dollars toward them.

Ds a manufacturer of dairy products, Nestlé "new that there were plenty of other

companies operating in the local mar"et with their own product lines. So they decided to

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offer something different something unique to their customers, they came up with the

Nestlé -ruit :ogurt. In doing this they eliminated a percentage of the mar"et# but it also

gave them a Lniche= that they could capitali%e on, and e$panded their mar"et in a way that

other manufacturers could not ta"e advantage of.

Ene needs to understand that people purchase products or services for three basic

reasonsA

• To satisfy basic needs.

• To solve problems.

• To ma"e themselves feel good.

:oull need to determine which of those categories your product or service is the solution

to, and be prepared to mar"et it accordingly. :our product or service may fit more than

one category

The ne$t step in creating an effective mar"eting strategy is to %ero in on the target mar"et.

Peroing in on the target mar"et is done by using @ar"et Segmentation.

The primary mar"et of Nestlé is local or regional. The first thing they did was to research

the demographics of the community, and divide it into mar"et segmentsA

• DgeA children, teens, young, middle, elderly

• 2enderA male, female

• /ducationA high school, college, university

• IncomeA low, medium, high

• @arital statusA single, married, divorced

• /thnic and?or religious bac"ground

• -amily life cycleA newly married, married for '* < 4* years, with or without

children.

This information was available to them through the local town, hall, library, or 5hamber

of 5ommerce.

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Ne$t, they needed to segment the mar"et as much as possible using psychographics as

their guideA

• ifestyleA conservative, e$citing, trendy, economical

• Social classA lower, middle, upper

• EpinionA easily led or opinionated

• Dctivities and interestsA sports, physical fitness, shopping, boo"s

• Dttitudes and beliefsA environmentalist, security conscious.

In addition, they wanted to find out how they purchasedA seasonally, locally, only in

volume, who ma"es the decisionsQ It is important to note that businesses, unli"e

individuals, buy products or services for three reasons onlyA to increase revenue, to

maintain the status quo, or to decrease e$penses. If Nestlé filled one or more of these

corporate needs, then they might have had found a target mar"et.

&y now they had a picture emerging of who they thought their ideal customer was R or

who they wanted him to be. Kepending on the nature of their business, Nestlé might even

be able to write a description of their customer.

M@y target customer is a middle#class woman in her 7*s or 9*s who is married and has

children, and is environmentally conscious and physically fit.M

&ased on the numbers Nestlé uncovered in their research, above, they may even "now,

for e$ample, that there are appro$imately 0*** of those potential customers in their area

It may well be that 7*** of them are already loyal to a competitor, but that still leaves

)*** who are not, or who have not yet purchased the product from anyone.

ots of times prospective customers dont "now about the company Nestlé or their

product Gthe fruit yogurtH, or cant tell the difference between Nestlé and others. It is the

ob of people at Nestlé, once to "now who their best customers are, to target the group

that theyve identified < even if they have competition.

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In addition, they may decide, using the e$ample above, that Nestlé would li"e to e$tend

their target mar"et to include women from 8* < )* years of age. If they go bac" to the

basic reasons why people purchase goods or services, and can find ways to target their

efforts to that age group, they may be successful in capturing a bigger share of the

mar"et

En the other hand, what if Nestlé speciali%ed the product or service and then researched

the target mar"et, only to discover that there are probably less than O8 people who will

buy from themQ

-irst of all, if those O8 are corporate customers who will spend hundreds on your product

or service annually, then Nestlé has nothing to fear. &ut if those O8 are only going to

spend s.)** every decade on your product or service < then Nestlé needs to go bac" to

the drawing board of planning the business and perhaps determining a wider target

mar"et < but at least they would be armed with all the information they need to start

again, or go in a different direction.

ets face it < theres a mar"et, and a target mar"et, for everything.

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Target @ar"et and Strategies

Dfter a company has defined mar"et segments, it can enter one or many segments of a

given mar"et. Target mar"eting involves evaluating each mar"et segment=s attractivenessand selecting one or more segments to enter, these selected segments are called target

+arkets. D company should target segments in which it can profitably generate the

greatest customer value and sustain it over time.

Target @ar"eting involves concentrating your mar"eting efforts on one or a few "ey

segments. Target mar"eting can be the "ey to a business=s success.

The beauty of target mar"eting is that it ma"es the promotion, pricing and distribution of

your products and?or services easier and more cost#effective.

D company with limited resources might decide to serve only one or a few special

segments or Gmar"et niches.H Such GnichesH speciali%e in serving mar"et segments that

maor competitors overloo" or ignore. Dlternatively, a company might choose to serve

several related segments < perhaps those with different "inds of customers but with the

same basic wants. Nestlé -ruit :ogurt=s mar"eting team could choose from either of the

following strategiesA

%& Cost Lea!ershi# ;Un!i))erentiate! or Mass' "trateg,

This strategy emphasi%es efficiency. &y producing high volumes of standardi%ed

products, the firm hopes to ta"e advantage of economies of scale and e$perience

curve effects. The product is often a basic no#frills product that is produced at a

relatively low cost and made available to a very large customer base. @aintaining this

strategy requires a continuous search for cost reductions in all aspects of the business.

The associated distribution strategy is to obtain the most e$tensive distribution

possible. !romotional strategy often involves trying to ma"e a virtue out of low cost

product features.

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To be successful, this strategy usually requires a considerable mar"et share advantage

or preferential access to raw materials, components, labour, or some other important

input. 3ithout one or more of these advantages, the strategy can easily be mimic"ed

by competitors. Successful implementation also benefits fromA

• process engineering s"ills

• products designed for ease of manufacture

• sustained access to ine$pensive capital

• close supervision of labour

• tight cost control

• incentives based on quantitative targets.

/$amples include low#cost airlines such as /asyet and Southwest Dirlines, and

supermar"ets such as ;wi"Save.

.& Di))erentiation "trateg,

Kifferentiation involves creating a product that is perceived as unique. The unique

features or benefits should provide superior value for the customer if this strategy is

to be successful. &ecause customers see the product as unrivaled and unequaled, the

price elasticity of demand tends to be reduced and customers tend to be more brand

loyal. This can provide considerable insulation from competition. +owever there are

usually additional costs associated with the differentiating product features and this

could require a premium pricing strategy.

To maintain this strategy the firm should haveA

• strong research and development s"ills

• strong product engineering s"ills

• strong creativity s"ills

• good cooperation with distribution channels

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• strong mar"eting s"ills

• incentives based largely on subective measures

• be able to communicate the importance of the differentiating product

characteristics

• stress continuous improvement and innovation

• attract highly s"illed, creative people

/& "eg+entation "trateg,

In this strategy the firm concentrates on a select few target mar"ets. It is also called a

focus strategy or niche strategy. It is hoped that by focusing your mar"eting efforts on

one or two narrow mar"et segments and tailoring your mar"eting mi$ to these

speciali%ed mar"ets, you can better meet the needs of that target mar"et. The firm

typically loo"s to gain a competitive advantage through effectiveness rather than

efficiency. It is most suitable for relatively small firms but can be used by any

company.Ds a focus strategy it may be used to select targets that are less vulnerable to

substitutes or where a competition is wea"est to earn above#average return on

investments.

The following diagram illustrates the use of each target mar"eting strategy accroding to

its mar"et scope and compentency.

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Kue to the nature of the product B uniquely traditional yet contemprary C and the available

mar"et segments, Nestlé -ruit :ogurt=s mar"eting team chose to combine multiple

strategies. The team combined +arket seg+entation strateg, with #ro!ut

!i))erentiation strateg, which was an effective way of matching Nestlé -ruit :ogurt=s

product strategy Bsupply sideC to the characteristics of its target mar"et segments Bdemand

sideC. &ut before any further decision was made, the mar"eting team evaluated the mar"et

segments.

In evaluating segments to target, Nestlé=s mar"eting team observed three factorsA

• Segment si%e and growth

• Segment structural attractiveness

• 5ompany obectives and resources

The team collected and analy%ed data on current segment sales, growth rates, and

e$pected profitability for various segments. It was observed that due to !a"istan=s uneven

income distribution and education level, it would be difficult for consumers to accept a

product of price s.'4 Balthough lowC and reali%e the health benefits and nourishment the

product provides. Enly developed cities such as ;arachi, ahore and Islamabad had an

even income distribution level and literacy rate that was adequate. -or this reason, only

LD= class citi%ens of the maor developed cities of !a"istan includingA Islamabad, ahore

and ;arachi were chosen as first target segment.

D survey also underlined that the changing consumer patterns of young males and

females mainly due to diet awareness, health consciousness and eating out habits has

increased the rate of consumption of ready to go Bfast foodC food products. +ence a

product, such as Nestlé -ruit :ogurt itself, that offers combined benefits of a healthy diet

in addition to being ready to go, would definitely catch the eye of the youth population.

This led the mar"eting team to choose all health conscious males, females and adults to

be put up as the second target segment of Nestlé -ruit :ogurt.

En the basis of this information, Nestlé -ruit :ogurt=s mar"eting team identified Nestlé

-ruit :ogurt=s target mar"et to constitute lass arahi, (sla+a$a! and

Lahore < all +ales, )e+ales and a!ults who are health conscious people and who want

healthy alternative to un" food but with good taste.

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!ositioning

!ositioning can be defined as how your target mar"et defines you in relation to your

competitors. D good position ma"es the product unique and is considered a benefit by thetarget mar"et. Now we will tal" about how our chosen organi%ation GNestléH is

positioned in !a"istan.

There are many factors that we will be ta"ing into consideration. The first and foremost

factor that we will be considering is the number of o+#etitors. Dccording to what the

studies show there are three main competitors of Nestlé i.e. Elpers, !rime yogurt, and

raw yogurt. Ds stated above, the first requirement of good positioning is that the product

should be uni-ue. 3hen we relate this factor to the Nestlé -ruit :ogurt we see that the

product indeed is unique, as no competitor before introduced yogurt that was flavored.

&ut being unique is not enough. The product has to be $ene)iial for the target mar"et

and we see that Nestlé -ruit :ogurt is very much li"ed by "ids and the fruit lovers.

3hen we are comparing one thing with another we have to loo" at all the GcompetitiveH

factors that ma"e the product conspicuous and prominent among the others. The ne$t

factor is )la2or. Nestlé -ruit :ogurt is available in different flavors with a tinge of

originality which boosts up the level of quality. Dnd as mentioned previously this product

is not subected to high amounts of heat therefore it retains the original taste. This high

quality product is available at a very a))or!a$le #rie or !; '4. D price that is

affordable to almost anyone. In a country li"e !a"istan, price does play a pivotal role in

helping the target mar"et to decide which product to buy. &esides this, according to our

culture, accessories of food include lots of things. Ene of them is raita. Nestlé has been

innovative enough to introduce the Nestlé raita in order to stand out in the row of

competitors.

The ne$t factor that we=re going to discuss is -ualit, #akaging& !ac"aging is another

factor by which Nestlé -ruit :ogurt stands out in the row of competitors. Dccording to

the studies, it has been seen that most of the sales are in the maor urban areas of

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!a"istan. ural areas and minor urban areas still use the conventional raw yogurt. So its

basically the people of the urban areas who are more literate, "nowledgeable, and

hygiene conscious, whereas the people in the rural areas neither "now this stuff nor care

about this. The pac"aging is composed of imported seals and a sterili%ed plastic container.

The ne$t factor is the high $u!get a!2ertising ati2ities. Nestlé spends huge amounts in

the DT and &T activities in order to become the prominent members among the

competitors and to have a good image in the eyes of the target mar"et.

Dll these positioning factors are then subected to the perceptual map. The perceptual

map is a two dimensional map used by mar"eters in order to perceive the comparative

importance of each point of every brand available.

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Strategic Kirection of Nestlé -ruit :ogurtSetting strategic direction involves answering two questionsA 3here are we nowQ Dnd,

where do we want to goQ

Where are :e no:

D detailed approach of assessing where we are now includes S3ET analysis and

environmental scanning. /ach is e$plained in detail belowA

'2*T Analysis

"TREN?T@"

• Their brand recognition.

• The employees want to achieve higher

volumes by renovating e$isting products and innovating new products.

• Nestlé is a low cost operator which

allows them to beat the competition by producing low cost products and alsoedging ahead with low operating costs.

• They have a great research and

development team.

WE=>NE""E"

• They have not entered into many local

cities.

• !ac"aging is not that attractive.

OPPORTUN(T(E"

• +ealth#based products are becoming

more popular in the world including!a"istan.

• &ecause they are a mar"et leader

B94.0UC, they can introduce morehealth#based products without anydoubts.

• Sponsorship can be gained through

different means, such as sporting

events.

T@RE=T"

There is a potential intense competition

amongst the top players in thecompetition.

5ompetitors can use aggressive

mar"eting strategies li"e cutting prices.

Dlong with this comes increased

competition to gain mar"et share.

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Where !o :e :ant to go

;nowing where the organi%ation is at the present time enables managers to set a direction

for the firm and start to allocate resources to move towards that direction. Two techniques

to aid in these decisions areA !ortfolio and @ar"et !roduct analysis.

The Portfolio of Business: B#3 %atri-

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Market Pro!ut =nal,sis

-irms can also view growth opportunities in terms of four combinations of current and

new mar"ets and current and new products. Ds Nestlé attempts to increase the sales of its

fruit yogurts= business, it must consider all four of the alternative mar"et#product

strategies.

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CONCLU"(ON

Nestlé is committed to offering consumers high#quality food products that are safe, tastyand affordable. The Nestlé Seal of 2uarantee is a symbol of this commitment. ;eeping

this in mind, Nestlé developed a unique healthy product which is a substitute to sugary

un" food li"e carbonated drin"s, ice#creams and desserts.

Nestlé -ruit :ogurt, a value added product, is categori%ed as a chilled dairy product

which has all the goodness of mil", yogurt and fruit.

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&I&IE2D!+:

*ook re)erene

“Marketing Strategy and plan”

@ichael vag,

We$site

www.nestle.in

www.business.gov.in

www.wi"ianswar.com.
http://www.business.gov.in/http://www.business.gov.in/

Marketing Fruit Yogurt Edit 14-1-14

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Transcript of Marketing Fruit Yogurt Edit 14-1-14