Analysis on Nestlé product and market environment

Team 2: Ángela Guadalupe Rodríguez García, Ximena Ruan Barrón y María Fernanda BuruatoFaculty of Economics and BusinessPrinciples of Marketing Professor Xin SongOctober 4th 2024

ANALYSIS ON

PRODUCT AND MARKET ENVIROMENT

Nestlé

good food, good life.

Nestlé

Health and Wellness Evolution

Health and Nutrition Focus

Global Expansion and New Products

Diversification and Expansion

2001-2010

1981-2000

1948-1980

1866

1866-1900

Foundation and early growth

HISTORY

Plant-based foods

Zero Gas Emissions

Atrium Innovations

Ferrero

2022

2020

2018

2017

2013

Sourcing Guidelines

HISTORY

E-commerce and Direct-to-Consumer Sales

Technological Innovation

Sustainability and Environmental Impact

Health and Wellness

Industry

1. Demographic Characteristics

Their main indicators are the age of the each group and their generation (Reza, 2020).They stated in their website that their products helps pets to thrive, children to grow healthily and parents to age gracefully (Nestlé Global, n.d.).

TARGET MARKET ANALYSIS

Asia, Oceania, Africa

Greater China

Europe

Latin America

North America

Present in over 188 countries

Divided into zones

Geographic Characteristics

Ethical and sustainalble

With time consumers have become more environmmentaly concious about the brands they buy, as they prefer the ones who align with their values. In order for people to still be interested in their products, Nestlé has taken steps to reduce its greenhouse emisions, to improve the supply chain sustainabililty, even having campaigns to reduce plastic waste. Nespresso has a recyclying program which appeals to eco-concious consumers.

Convenience

Is important to understand the lifestyle of consumers, as some on them specially in urban areas, are more likely to look for convinient, time-saving products. An example is Nescafé 3-in-1, whomever can safe time, as it already includes everything needed to make a coffee (Reza, 2020).

Health

With a diversified portafolio, Nestlé is able to be involved in the trends surrounding health and wellness around the world. They even have specific brands, such as Garden of Life & Optifast which have a focus on organic ingredients, high nutrition and weight loss. Nestlé has also changed the recipes for many of its products to lower sugar content and more natural products.

Phychographic Characteristics

For Nestlé, a global company operating in the food and beverage industry, several microenvironmental factors play a significant role in shaping its strategies and performance. These factors include the company’s suppliers, customers, competitors, intermediaries, public groups, and employees.

Microenviroment

Quality and pricing

Sourcing quality

Raw materials

Health concerns

Sustainability

Drives innovation

Customers

Competitors

Suppliers

Nestle's marketing

Macroenvironmental factors refer to broader forces that affect not only Nestlé but also the entire industry in which it operates. These factors are generally beyond the company’s control but can significantly influence its strategic decisions and overall business performance.

Macroenvironment

Cultural

Economic

Natural

Nestlé

Conclusion and recommandations

Nestlé is a huge experienced company with multiple phasets, its growth has been exponential since their early stages, however nowadays the world moves quicker that it dit before, keeping up with the new consumeer behaviors and preferences without altering the prices in a significant way represents a gigantic challenge. The advantage this company has outside its diverse catalogue is their enviromental focus, their comptomise to promote not only their products but their clean processes (including employee's treatment, farmers support, quality ingridients, and less waste), but even in the ethical field they ought to be catious whlist lately people are extra involved in sustainable matters. In essence the company has multiple opportunity areas and adapting quikly without betraying its core values will take them even higher from the reputation they had already earned.

Nestlé's capacity to localize products, develop continuously, and adjust to shifting consumer wants is the foundation of its marketing success. Key conclusions from Nestlé's marketing story consist of:-Brand Trust and Reputation: Nestlé emphasized with the quality and safety, especially in newborn nutrition, Nestlé developed a strong brand reputation and won the trust of consumers all over the world.-Localized Marketing: Nestlé customized its products according to regional tastes and preferences by using a decentralized marketing strategy. This tactic helped in its entry into a number of international markets.-Product Innovation: Nestlé continuously developed fresh categories of products, like bottled water and instant coffee (Nescafé), with the help of successful marketing campaigns that emphasized convenience and health.

Key findings

Collaborate with digital influencers and content creators to create modern versions of iconic campaigns.

Creating country-specific variations of global brands

Emphasize the health benefits and sustainable sourcing of premium products, especially for health-conscious brands like Nescafé and dairy alternatives. Highlight certifications, sustainability practices, and responsible sourcing through product packaging and digital marketing.

With the diverse brands in its portfolio, Nestlé caters to diverse customer segments. Tailoring campaigns for specific product categories will boost their effectiveness.

PROduct

Future recommendations 4ps strategy

PRice

place

promotion

9. Business Review. (2020). Nestlé’s approach to customer-driven product innovation. Harvard Business Review. https://hbr.org/nestle-customer-strategy

8. Francis, T., & Hoefel, F. (2018). ‘True Gen’: Generation Z and its implications for companies. In McKinsey & Company. https://www.mckinsey.com/~/media/mckinsey/industries/consumer%20packaged%20goods/our%20insights/true%20gen%20generation%20z%20and%20its%20implications%20for%20companies/generation-z-and-its-implication-for-companies.pdf

7. Financial Times. (2022, October 14). How Nestlé is responding to competition and consumer demand in a shifting market. Financial Times. https://www.ft.com/nestle-competition-strategy

6. Financial Times. (2022, October 14). How Nestlé is responding to public pressure on sustainability and environmental impact. Financial Times. https://www.ft.com/nestle-sustainability

5. Financial Times. (2022, October 12). Nestlé: Global dominance and the push for sustainability. Financial Times. https://www.ft.com/content/nestle-sustainability

4. Euromonitor International. (2022-c). Global market segmentation and consumer insights in the food and beverage industry. Euromonitor International.

3. Euromonitor International. (2022-b). Global food and beverage industry overview: Trends and opportunities. Euromonitor International.

2. Euromonitor International. (2022-a). Competitive landscape of the global food and beverage industry. Euromonitor International.

1. Business Insights. (2020). Nestlé at 150: A legacy of innovation and leadership in nutrition. Harvard Business Review. https://hbr.org/nestle-150-innovation-leadership

References

22. Statista. (2023). Nestlé's global supply chain: Key insights and trends. Statista. https://www.statista.com/nestle-supply-chain

21. Statista. (2023). Nestlé’s plant-based product offerings and consumer trends. Statista. https://www.statista.com/nestle-plant-based

20. Statista. (2023). Nestlé market share by region 2022. Statista. https://www.sta tista.com/statistics/nestle-market-share

19. Reza, Manjurul. (2020). Analysis of Marketing Strategy and Quality Policy of Nestlé. 3. 1145-1152.

18. Nestlé. (n.d.). Our history. https://www.nestle.com/aboutus/history

17. Nestlé. (2023). Sustainability report 2023: Reducing our environmental impact. https://www.nestle.com/sustainability

16. Nestlé. (2023). Sustainability report 2023: Achieving net-zero emissions by 2050. https://www.nestle.com/sustainability

15. Nestlé. (2023). Annual report 2023. https://www.nestle.com/investors/annual-report

14. Nestlé. (2022). Nestlé health science: Meeting consumers’ health needs through nutrition. https://www.nestlehealthscience.com/our-solutions

13. Nestlé Global. (n.d.-b). KitKat. https://www.nestle.com/brands/chocolate-confectionery/kitkat

12. Nestlé Global. (n.d.-a). About us. https://www.nestle.com/about

11. Harvard Business Review. (2020). Nestlé’s strategy for maintaining supplier relationships. Harvard Business Review. https://hbr.org/nestle-supplier-strategy

10. Harvard Business Review. (2020). Nestlé’s evolving strategies in developing and developed markets. Harvard Business Review. https://hbr.org/nestle-strategies

Nestlé's target market

Nestlé's target market is vast and diverse due to its wide range of products that cater to different consumer needs globally. The company strategically segments its market based on demographic, geographic, and psychographic factors to address various consumer preferences effectively.

Nestlé announces significant investments in plant-based foods, reflecting evolving consumer preferences toward alternative proteins.

The company pledges to reach net zero greenhouse gas emissions by 2050, emphasizing sustainability.

For example: Nido is a baby formula, and whilst babies are unable to buy it, they target the parents (Reza, 2020), yet they are targeting an specific age with these product. KitKat is another of their brands and one of the emphasis they make is the fact that the cocoa is sourced reponsibly and improving the lives of families that harvest it (Nestlé Global, n.d.-b), younger generations are more likely to care about the environment and social justice, thus searching products that align with their values.

By the mid-1900s, Nestlé had grown to become a multinational group of companies, expanding out into bottled water, pet food, and even pharmaceuticals. Nestlé persisted in expanding through calculated acquisitions, and by the end of the 20th century, it had established itself as the biggest food corporation in the world and was a significant participant in a variety of food and beverage sectors.

The Anglo-Swiss Condensed Milk Company is founded by Charles Page and George Page in Cham, Switzerland. Henri Nestlé, a German pharmacist, develops a milk-based baby food called "Farine Lactée" in Vevey, Switzerland. This marked the beginning of Nestlé.Henri Nestlé sells his company and factory in Vevey, and the new owners continue to expand the business, producing condensed milk and baby food. In an effort to expand its product offering, Nestlé entered the condensed milk market between 1886 and 1900. This sector was experiencing growth as a result of urbanization and the lack of fresh milk. The business opened factories in Europe and the United States, opening the door for global expansion. Nestlé controlled significant markets for infant food and condensed milk by 1900, and it was one of the world's top producers of food.

North America uniquiness

Their North America branch consits of the Unites States and Canada. Even though they are in the same zone the products Nestlé offers are different. Take for example the beverages available. Milo, Nesquick are available in both countries, yet in the Uniates States the product ABUELITA is available unlike in Canadas. Abuelita is label as authentic mexican hot chocolate, the US has a larger population of mexican, and hispanics in general ,who would be more incline to buy this specific product.

Local vs. global products

Nestlé tailors its products to meet local tastes. For example, in India, Maggi noodles are flavored to match Indian palates, while in Japan, KitKat flavors include sake and wasabi to cater to local tastes.

Nestlé continued to grow and diversify, with a major focus on health and nutrition. This period marked a shift in the company’s strategy as it aimed to strengthen its position as a leader in the health and wellness sector

The company sells its U.S. confectionery business to Ferrero, signaling a focus shift toward health, nutrition, and pet care.

Develop vs. Developing markets

Develop and developing markets have an great influence in Nestlé's strategy around the world. For instance developed markets, like the U.S. and Europe, there is a greater focus for premium and healthy products. Since in developing markets (Asia and Africa) people have a different priority, they care more about how affordable the product is and its accessibility, which impacts the packaging sizes, and lower the prices.

Nestlé commits to the Responsible Sourcing Guidelines and continues to invest in sustainability and environmental initiatives.

The evolution of health and wellness at Nestlé has been a long-term journey, reflecting the company’s commitment to adapting to changing consumer needs and global trends.

Nestlé acquires Atrium Innovations, enhancing its health and nutrition portfolio.

Urban vs. Rural Consumers

In urban areas, consumers prefer convenient, ready-to-eat foods, so Nestlé markets its instant foods like Maggi and ready-to-drink beverages heavily. In rural areas, where purchasing power might be lower, products like Nestlé Everyday Dairy Whitener are marketed as an affordable alternative to fresh milk.

Nestlé experienced significant global expansion and diversification in its product portfolio. This period was crucial in shaping the company into a global food giant, extending its operations beyond Switzerland and developing new products to meet evolving consumer demands.