Marketing Mix of Nestle - Four P's
Nestle is a leading multinational food and beverages company with a large and diverse product portfolio. The company is headquartered in Vevey, Switzerland and employs around 308,000 people. Nestle is truly a global company whose products sell across 190 countries. In the recent years, Nestle’s focus on healthy nutrition has grown and the brand is investing in innovation to bring healthier products for its customers. The company released around 1300 new products meant to address nutritional gaps and targeted mainly at babies and expecting mothers or new mothers. Despite the rising competition in the food and beverages market, the company has retained its leadership position through its intense focus on the nutrition needs of customers globally. While the product portfolio of Nestle has continued to grow, the company also achieved better financial performance in 2018.
Take a look at the marketing mix of Nestle highlighting the four P’s - product, place, price and promotion.
Nestle has a large and diverse product portfolio which mainly includes products in the following seven categories. In the recent years, the company has focused on innovating its product portfolio based upon the changing needs of the consumers worldwide.
Powdered and liquid beverages:
This is the largest and most profitable product segment of Nestle. This category includes Nestle’s coffee, cocoa and malt beverages and tea products. It also includes some of the most iconic brands by Nestle : Nescafé, the world’s favorite coffee brand; Nespresso, premium coffee; and Milo, the world’s most popular chocolate malt drink. This category accounted for 23.6% of Nestle’s net sales in 2018 and generated CHF 21.6 billion in revenues.
Nutrition and Health Science: This category of products includes Nestle’s infant formula and baby food. It accounted for 17.7% of Nestle’s net sales in 2018 and generated CHF 16.2 billion in revenues.
Milk products and Ice cream: Milk products and specifically the Nido brand is a key pillar of Nestle’s health and wellness strategy. Nido offers a large range of milk and milk based products for various stages in childhood. Its products feature instant dry whole milk with Vitamin A & D. Nido has been around for at least 70 years. Nestle also offers a wide range of ice-cream products at various price points including affordable and premium priced products. This category accounted for 14.5 % of Nestle’s sales in in 2018 and generated around CHF 13.2 billion in revenues.
Petcare:- Nestle offers a large range of petcare products under its Purina label including Pro Plan, Purina ONE, Gourmet and Merrick, among others. The company has continued to improve its core products with a focus on nutritional value. Pet care products of Nestle accounted for around 14% of its entire sales in 2018 and generated CHF 12.8 billion in revenue.
Prepared dishes and cooking aids:- This category of Nestle products has several iconic brands, including Maggi, Stouffer’s and Buitoni that cater to regional and local tastes. The company is focusing on adding more natural and healthy ingredients to products in this category. In 2018, this segment accounted for 13.2% of the net sales of Nestle and generated CHF 12.1 billion in revenue.
Confectionary:- In this category, apart from Nestle’s iconic global brand Kitkat, the company has also brought several more local brands. This category accounted for 8.9% of Nestle’s net sales in 2018 and generated CHF 8.1 billion in revenues.
Waters:- Nestle's Pure Life is the world's biggest bottled water brand which is sold across several markets around the world.
Nestle has its headquarters in Switzerland. However, the brand also has regional offices in locations throughout the world. It has also divided its .business into three key zones based on geographical markets. These zones are Americas, Europe, Middle East and North Africa (EMENA) and Asia, Oceania and sub‑Saharan Africa (AOA). The Americas are the largest zone accounting for the highest sales and revenue of the brand. Both North America and Latin America reported positive organic growth in 2018. Total revenue from the Americas reached CHF 31.0 billion where United States and Canada together generated CHF 20,540 millions. EMENA generated CHF 18.9 billion in revenue and AOA generated CHF 21.3 billion in revenues. The company also around 30 product technology and research and development centers worldwide. The company has managed a large and global distribution network which helps it maintain its global presence efficiently. from its more than 1600 warehouses the company transports more than 145,000 tonnes daily.
The food and beverages industry has grown highly competitive. In this era of intense competition, pricing becomes important both in terms of marketing and sales. Nestle has used a varied pricing strategy. It has brought products in varying pricing ranges from affordable to premium and super premium. While the main target market of Nestle is the middle class consumer, it has also brought several products to the market targeted at the higher end. Its Natural Bliss Artisan Café creamer is targeted at the super premium market segment while several more products are priced affordably for the middle class consumer. Pricing strategy of Nestle also varies according to the geographical market as well as packaging and target market.
Nestle is a world famous brand. However, it also uses several marketing channels for the promotion of its brands and products. Apart from digital marketing, it also uses social media and other promotional channels for marketing of its brands. In the recent years, it has increased its focus on innovative marketing for growing sales and revenue. It has several iconic brands in its portfolio. However, the company is also focusing on increasing its online presence and investing in e-commerce. E-commerce has become both a channel of sales and marketing for Nestle. In 2018 the e-commerce channel accounted for around 7.4% of the net sales of Nestle. The company is using several more channels including Direct-to-Consumer, Convenience, Club, Value, Natural, Specialty stores, as well as Out-of-Home to reach consumers. In the past the company has used several attractive campaigns to increase the popularity and sales of its products. In 2018, it adapted a single advertising campaign globally after the relaunch of its Nescafé Gold.
- Nestle Annual Report 2018.