Situation Analysis For The Nestle Corporation Marketing Essay


In this report itll help to understand the concept and process of marketing, how to use the segmentation, targeting and positioning and understand the individual elements of the extended marketing mix and how to use marketing mix in different contexts. In learning outcome 01, we’re introducing a new product to the market. In that student is expected to understand and apply marketing planning process to launch the new product. And in this task student must do a presentation to launch the new product to the market. In learning outcome 02, student must do a situation analysis for the organization selected and select target market for the new product and propose a positioning strategy for the new product. In learning outcome 03 students is able to design and recommend the appropriate marketing mix for the new product and in that student is able to design product features, pricing the product, and explain the channels of distributing for the new product. And finally in learning outcome 04 students must discuss the alternative segments to the product and suggest possible market growth options t o the new product.


This report is about the concepts and principles in marketing process. We can use this marketing concepts and principles to introduce a new product to the market. By introducing a new product to the market, organization is able to using the planning process to launch th new product. In this report Nestle Corporation is introducing a new healthy milk powder to the market and they were doing situation analysis to the organization and positioning strategy to the product. Nestle corporation is design good product features, brand name, new distributing ways and pricing the product. Finally they doing some market growth to the product using Ansoff’s Matrix. By reading this report reader can have a clear knowledge about marketing concepts and how to use these concepts to a new product.

L01 Launching New Product To The Market.

L02 – Situation Analysis For the Nestle Corporation

Marketing Environment

The marketing environment surrounds and impacts upon the organization.

Internal Environment

The Micro Environment

The Macro Environment.

The Micro Environment



Pressure groups




Local residence





The Macro Environment

SWOT Analysis (, 2012)


Brand strengths – Nestle has very strong brand name and it’s easy to distribute among the customers.

Production innovation – The Company has been continuously introducing new products to the market.

Research and Development – Nestle has worldwide networks of centers 17 locations in four continents. An international staff of 3500 engaged in search for innovative new products and remotivate exist ones.

Market Share – High level of market share and that people all over the world trust and recognize Nestle as a big brand name.

Low Cost – They are low cost operators which allow them to not only to beat competition but also edging ahead operating excellence, innovation, renovation, product availability and communication is major strengths.


Mature market – One major weakness in Nestle is that it is entering into markets that are already major and can give a tough competition to new entrance.


Supply Chain – The Company has a complex supply chain management.


Expansion – potential to expand smaller towns and other smaller geographies, which is parents are famed for like breakfast cereals, smarties chocolates, carnation, etc.

Product offering – the company has the option to expand it’s product folio by introducing more products.

Global hub – since manufacturing some products is cheaper in ASIA than in any other continent.


Competition – Competition from the organized and unorganized sectors.

Changing consumer trends – increase consumer spending on consumer durable resulting in lower spending on FMCG products. ( fast moving consumer goods ).

International marketing standards –

Sectoral woes – rising prices of raw material and fuels and increasing packaging and manufacturing costs.

PEST Analysis for Nestle Corporation

It is very important that an organization consider its environment before beginning the marketing process.

Political Environment:-

Nestle is a good political partner in politics. They were donating money for the president candidates in presidential election.

Nestle corporation support many programmers and projects essential services and social services.

Ex: – supporting the “tackling the world water crisis” project.

The government increasing the prices of essential goods and it’ll affect to the organization and the new product.

By the time government change and the policies also get changed, it’ll affect to the customers behavior and to the company also.

Economic environment:-

Nestle corporation is a strong brand among the consumers and having a good business cycle in the market.

Increasing of interest rate will affect to the customer behavior and it’ll affect to the company.

Income distribution affect to the organization because when income distribution doesn’t happened equally customer behavior get changed.

The crisis of the world economic prices affect to the country and it’ll affect to the customers and to the organization.

The plentiful in

Social Environment:-

Family background and their culture will cause to their behavior in buying products, and it’ll cause to the organization.

Customers education level also affect to the organization, because if they don’t understand about the product well, they never going to buy it.

Customer’s beliefs, culture, and religion will cause to what they going to buy? Because it get changed customer by customer.

The trend of the society will affect on customers behavior, and it’ll affect to the organization.

Technology Environment:-

Organization can incorporate the latest technology to their operations.

Organization architecture and design has been the evolution of the information technology.

The use of technology can build good relationship with suppliers and customers.

Technology will cause to increase of the organization and they can improve their sales.

Segmentation Criteria

Market segmentation is the division of a market into different homogenous groups of customers. Market segmentation is depending on the specific characteristics of the product. These criteria can be divided by such as age and gender, or other distinction such as location and income.

Segmenting Consumer Market for Nestle

For the newly introduced ‘Strawberry Flavor Sustagen’ in Nestle corporation, our company using the demographic criteria for the segmentation. Demographic segmentation consist of dividing the market into groups based on such as age, gender, family size, income, occupation, education, religion, race and nationality. In here Nestle corporation use age, gender and income as the demographic criteria’s for the Strawberry Flavor Sustagen. This product is a low-fat milk powder.

Our company targeting the young adults and adults as the target market for the Strawberry Flavor Sustagen, because young adults and adults are using Sustagen mostly in the market and this product is a low-fat milk powder. Strawberry Flavor Sustagen can use both males and females. And Nestle Corporation targeting the consumers below 8000 income, because this product will not highly cost. In this case many customers will attract to this new innovative Strawberry Flavor Sustagen.

Positioning Strategy

Positioning is a concept in marketing which firstly introduced by Jack Trout. A company, a product or a brand must have positioning concept in order to survive in the market. If you don’t position your business your competitor will not let you to survive in the Market. Nestlé Corporation is chosen the Product Positioning as the Positioning Strategy for the New Strawberry Flavor Sustagen.

In the market, there is various kind of healthy milk powder brands that compete with the Strawberry Flavor Sustagen, but nestle will survive as always in the market because Nestle is a good, strong brand name in the market. In this newly introduce product there’re various dimensions. This Sustagen is highly possessed of good qualities and it’s really good for the health and it’ll helpful for reduce the fat. Most of diabetic’s patients are young adults and adults, because of that we target the young adults and the adults to the new product.

Nestle corporation is going to introduce this product to the supermarkets and we’re give a free chance to our customers to have an experience with our newly introduced product. By this we can attract more customers to our product. Our company going to introduce this new product to the people in rural area also. Because there’s plenty of people in rural areas that have the capability to buy this kind of a product.

L03 – Design and Recommend the Marketing Mix

What is a product? Product is anything that is capable for satisfying customer needs. Features are characteristics of a product that offer benefits to the customer….

Product Features and Developing the Brand Name

Nestle Corporation introduced The Strawberry Flavor Sustagen is not like normal old type of Sustagen. It’s fully tasted with strawberry flavor and extra with mint. Sustagen is a world famous milk powder, which has customers all around the world. People all around the world know about the Sustagen and they tasted Sustagen. as a product it’s really easy to develop because it has a strong brand name. Nestle Corporation introduced this Strawberry Flavor Sustagen is the new member in Sustagen family and It’s tasted with strawberry and mint. And nestle corporation is expect to attract many customers to this New Strawberry Flavor Sustagen.

Nestle Corporation is developing the new product features to attract more customers to the product. Strawberry Sustagen is a healthy milk powder that helps to keep our body healthy and get nutrition for the day. In this product it includes vitamins that we need to our body for been healthy and keeps nutrition and alternative medicines. It’s fully tasted with strawberry flavor. Nestle corporation is decided to include more taste of milk and mint flavor to give a good taste to the customers. And also this product has attractive color that everyone like and with a nice mint smell.

Distribute the New Product to the Market

When an organization going to introduce a new product to the market, they must know how to distribute the new product to customers. And most important thing is organization must know how to hold the product in customer’s hand. As the distribution concepts, Nestle Corporation is using Consumer Market concept. First of all our marketing team is planning to distribute this product to Supermarkets in municipal and rural areas. Because middle level customers are coming to supermarkets. Our target market is middle level class customers. As municipal areas, there are some middle level class customers in rural areas that can buy these types of products. So our company chooses supermarkets to launch our new products and distribute through the supermarkets.

Pricing the New Product

Price is the amount of money or goods for which a thing is bought or sold. The way you set the price to your product, will help to stay in the market or it’ll cause to leave the market. For a pricing method for our new product, Nestle Corporation choose the customer-based pricing.

There are two factors that affecting for pricing decisions. They are internal factors and external factors.

Internal factors Rs,

Market share – 100

Maximum profit – 150

Marketing strategy – 80

Costs – 90

External factors

Customer and channel

Partner expectation – 70

Competitive and

Related products – 90


Regulation – 20

Final price Rs, 600

This is the best price that our company can charge from the customers, because if our company charge high cost it’ll cost to have a production lost in the market. So this our company guessed this price is fair and attractive. Nestle Corporation expecting that this product will attract many customers.

Promote the new product

Nestle Corporation is expecting to launch our new product to the supermarkets and distribute through them to the customers. Before that our company is going to promote this new product to customers well. For that our company chooses new promotion tips. Our first aim is give the main idea to customers that this new product is strawberry flavor and it’s good for the health. Targeting that first our company is going to made-up a curiosity in customers mind. For that, our company creates a strawberry arch in the entrance to the supermarkets, and when customers come inside to the supermarket, in the front some people with strawberry dresses to give the main idea to customers. After that we give some leaflets to customers by introducing the new product and our marketing team is ready to inform about the product and its benefits. Finally we’re going to give a chance to our customers to taste our new product. We’re 100% sure that our customers will like our new Strawberry Favor Sustagen and they’ll surely use this for their day today life.

L04 – Market Development


After our new product enters to the market we must know how to keep our sales in a good level and how to develop the product in the market. Nestle Corporation is using the Ansoff’s matrix as the market growth option to develop the product. The Ansoff’s Growth Matrix is a tool that helps businesses decide their product and market growth strategy. Ansoff’s market/product growth matrix suggest that a business attempts to grow depend on whether it markets new or existing products in new or existing market. The output from the Ansoff’s matrix a series of suggested growth strategies that set the direction for the business strategy.

Market penetration.

Market development.

Product development.


Our corporation suggests Market Penetration and Marker Development as market growth options for the new product. Market Penetration is a name given to a growth strategy where the businesses focus on selling existing products into existing market. Market penetration is to achieve another four more objectives.

Maintain or increase the market share of current product.

Secure dominance of growth market.

Restructure a mature market by driving out competitors.

Increase usage by existing customers.

Market Development is the name given to a growth strategy where the business seeks to sell its existing products into new markets. There are many ways to use this strategy.

New geographical markets.

New distributing channels.

New product dimension or packaging.

Different pricing policies for attracts new customers or new markets.

Using Ansoff’s Matrix our company is going to do some changes in our new product. Our company is hoping to increase the market by selling our new products in the rural areas in the country. Nestle corporation is going to introduce 500g Strawberry Sustagen packets to groceries in municipal and rural areas in the country. Our marketing team is hoping to maintain and develop the market share.

And our team is going to do some advertising programmers to develop our product. In that we’re hope to 5% discount if our customers buy two Strawberry Sustagen.

Nestle Corporation is going to introduce this new product in to the International Market. Our marketing team is planning to export this New Strawberry Sustagen country like India, Pakistan and Bangladesh.

And also we’re going to use new distributing channels to distribute our new product. Our team uses more agents to distribute the product in towns and by door by door. They’re fully informed about the product and they always ready to give an instruction about the product.


In this report we can understand about the various elements of the marketing process and the benefits and costs of a marketing orientation for a selected organization. Understand the micro and macro environmental factors, segmentation criteria, targeting strategy and positioning to the new product. Also how to develop the product features, brand name and how to set a good price for the customers. How to distribute the product to the customers and promote the product to the customers. In this report can have a good knowledge of marketing mixes in different contexts. When doing this report we can have good knowledge about the market and the behavior about the market.

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