Nestle Marketing Audit: SWOT analysis PESTL analysis

1. MARKETING MANAGEMENT ASSIGNMENT
MARKETING AUDIT REPORT
ON
NESTLE’s MILO
Made by:
RAHUL TANWAR
24-025
SECTION – A

2. INTRODUCTION
NESTLE’s relationship with India dates back to 1912, when it began trading as The NESTLÉ
Anglo-Swiss Condensed Milk Company (Export) Limited, importing and selling finished
products in the Indian market.
After India's independence in 1947, the economic policies of the Indian Government
emphasised the need for local production. NESTLÉ responded to India's aspirations by
forming a company in India and set up its first factory in 1961 at Moga, Punjab, where the
Government wanted NESTLÉ to develop the milk economy. Progress in Moga required the
introduction of NESTLÉ's Agricultural Services to educate advice and help the farmer in a
variety of aspects. From increasing the milk yield of their cows through improved dairy
farming methods, to irrigation, scientific crop management practices and helping with the
procurement of bank loans.
NESTLÉ set up milk collection centres that would not only ensure prompt collection and pay
fair prices, but also instil amongst the community, a confidence in the dairy business.
Progress involved the creation of prosperity on an on-going and sustainable basis that has
resulted in not just the transformation of Moga into a prosperous and vibrant milk district
today, but a thriving hub of industrial activity, as well.
NESTLÉ has been a partner in India's growth for over a century now and has built a very
special relationship of trust and commitment with the people of India. The Company's
activities in India have facilitated direct and indirect employment and provides livelihood to
about one million people including farmers, suppliers of packaging materials, services and
other goods.
The Company continuously focuses its efforts to better understand the changing lifestyles of
India and anticipate consumer needs in order to provide Taste, Nutrition, Health and
Wellness through its product offerings. The culture of innovation and renovation within the
Company and access to the NESTLÉ Group's proprietary technology/Brands expertise and
the extensive centralized Research and Development facilities gives it a distinct advantage in
these efforts. It helps the Company to create value that can be sustained over the long term by
offering consumers a wide variety of high quality, safe food products at affordable prices.

3. NESTLÉ India manufactures products of truly international quality under internationally
famous brand names such as NESCAFÉ, MAGGI, MILKYBAR, KIT KAT, BAR-ONE,
MILKMAID and NESTEA and in recent years the Company has also introduced products of
daily consumption and use such as NESTLÉ Milk, NESTLÉ SLIM Milk, NESTLÉ Dahi and
NESTLÉ Jeera Raita.
NESTLÉ India is a responsible organisation and facilitates initiatives that help to improve the
quality of life in the communities where it operates.
FUCTIONAL AUDIT
PRICE PLANNING:
Global pricing policies:
Apart from global coordination of prices on specific products and firms usually adopt one of
the three alternative pricing policies that cut across their product lines. These are:
 Polycentric pricing
 Geocentric pricing
 Ethnocentric pricing
Nestle use geocentric pricing policy.
Nestle products price planning
 Nestle dairy products are priced keeping in view the buying power of middle-income
and high-income social classes.
 The cost includes the cost of manufacturing, labour, raw materials etc. The industry
sales growth is largely driven by population growth as well as the amount of
advertising and product innovation taking place in the industry. The company has
resorted to pricing discrimination strategies to maximize the value of consumer
demand.

4.  Being a multinational brand, the pricing objective of Nestle is mainly to increase sales
as it has already penetrated the market. Their prices are not affected by price changes
by competitors, and they don't engage in price wars. Competition is met through
innovation. The prices of Nestle milk change as the product size is changed pf the
Product Life Cycle. And because of the contrast between the seller companies, they
offer same price. So there is no skim based or penetration based pricing by company.
 The retail prices are different according to their size and brand. However prices have
been standardized throughout Pakistan and there is no differentiation based on
geographical areas. There is no change in prices according to season. It remains the
same.
 They adopt same strategy in international marketing as in local marketing. But the
prices are according to the international currency.
PROMOTION PLANNING:
Promotion planning of Diary products:
The promotions of Nestle Dairy product are no doubt the best of all. Its intense advertising
has really captured the minds of all categories of people besides media advertising; the
company has signed several agreements with different sports in order to promote. For the
Advertising, the company has a policy that the commercial should best communicate its
message toward its target markets. The promotional planning of Nestle milk has taken the
emotions of youngsters quite successfully.
Promotion Objectives:
 To project sales of Nestle Dairy Products
 To create awareness among the masses about my new product of Nestle
 To achieve brand loyalty

5. SelectionofPromotion Media;
Selection of promotion media is done on the basis of whether the company wants:
 Immediate sales uplift - Achieve through television and other forms of electronic
media
 Gradual sales uplift
Promotion planning depends on marketing push or marketing pull strategy. Nestle milk is not
considered a seasonal product in Pakistan, so they do not need to promote very much.
Sponsoring Major and Rural Sport Region:
Another mode of promotion for nestle is sponsoring major and rural sport events. Milo a
brand from nestle always sponsors sporting events like badminton to bowling to the
Commonwealth Games. These kinds of promotion will always lead to the awareness of our
customers.
PACKAGING:
Since packaging is an integral part of product, nestle propose new packaging in this
marketing plan that is not only attractive and durable, but also functional too. Our innovative
packaging strive to ensure every product packaging guarantees freshness, safety, convenience
and whenever possible environmentally friendly too.
Since packaging is an integral part of our product, we propose new packaging in this
marketing plan that is not only attractive and durable, but also functional too. Our innovative
packaging strive to ensure every product packaging guarantees freshness, safety, convenience
and whenever possible environmentally friendly too.
Beyond homes, Nestle supplies its product to hotels, airlines, vending machines, quick-serve
restaurants, supermarket, and retailers.

6. DISTRIBUTION PLANNING:
 They distribute their products nationally and internationally throughout the world.
 Nestle are distributed using an indirect channel, that is, dealers. Nestle milk is sent to
warehouses after manufacture.
 They use intensive distribution for marketing coverage. Because its goals are to have
wide market coverage, channel acceptance and high total sales and profits.
 Distribution is made nationally and internationally through
 Motor carriers
 Waterways
 Airways
 Railroads, throughout the country in every city and village. It includes suppliers and
retailers
Supply chain:
There are various departments
 Raw material department
 Finished goods department
From the finished goods department the product goes to the warehouses.
Export Expansion Strategy:
There are two types of export expansion strategies
 Water fall
 Sprinkler
Nestle use waterfall strategy. It moves gradually to different countries.

7. ENVIRONMENTAL REPORT - Export Entry Mode:
JOINT VENTURES OF NESTLE
Shareholders
Nestlé has about 250 000 shareholders, none of whom individually own more than 3% of the
shares. As of December 31, 2003, Swiss investors held the major part of the stock (42%)
followed by US citizens (22%) and British (10%), French (8%), and German (5%)
shareholders.
Unfortunately, shareholder identities are not made public under Swiss law, but we do know
that Lillian de Bettencourt, heiress to the L’Oreal fortune and the richest woman in France,
has a holding in Nestlé. Nestlé and L’Oreal have a close relationship dating back to a
shareholder pact made in 1974. Nestlé holds a 26.4% stake in the world's largest cosmetics
group and has right of first refusal over the Bettencourt family's 27.5 percents take for 10
years, but with no obligation to buy. Whilst it is unlikely that Nestlé will take over L’Oreal in
the immediate future, it could well do so in a few years. It already has cosmeceutical joint
ventures with L'Oreal through Gal derma and Innéov.
EU clears CokeNestle deal - Coke-Nestle jointventure
European Union regulators have cleared plans by US firm Coca-Cola and Swiss food giant
Nestle to expand an international joint venture focusing on iced teas and coffee. In a
statement, the European Commission said there were no competition concerns, as the new
operation would still face "strong competition brands" such as Unilever's Lipton. The new
enterprise, Beverage Partners Worldwide, will be based in Zurich, Switzerland. Expanding on
a previous arrangement created in 1991 for the manufacture and distribution of Nestlé’s
Nestea brand, the new venture will increase the number of countries in which it operates to
40, from an initial 24.Coke will add its Tuan Yu Di and Yang Guang teas and Planet Java
coffees to the venture, while Nestle will contribute Belte tea, which is sold in Italy. Analysts
say both companies are looking to capitalise on the growing worldwide appetite for iced teas
and coffees, which have shown better growth than soda in recent years.

8. Cereal Partners Worldwide
In November 1989, Nestlé S.A. and General Mills, the Minneapolis-based maker of
breakfast cereals, snacks and baking aids, formed a joint venture to produce and market
breakfast cereals worldwide, with the exception of the United States and Canada. Based in
Morges, Switzerland, CPW officially began operations in early 1991. General Mills’
expertise and technology, combined with Nestlé’s worldwide presence and marketing
experience, quickly led to a breakthrough in Europe, which was CPW’s first target market.
NESTLE: MILKPAK
The joint venture between Milkpak Ltd. And Nestle S.A. came about in 1988 and the
company was renamed as Nestle Milkpak Ltd. Prior to that, Milkpak Ltd., produced
UHTmilk, butter, cream, desi ghee and fruit drinks at Sheikhupura factory. 21 branded
product lines were added during 1990 to 1998. Nestle Milkpak operates the largest and an
extremely efficient milk collection system in the country, which enables it to collect the
highest quality milk for production of UHT and powder milks as well as other milk based
products. The company voluntarily provides extension services of farmers in the area of
animal husbandry and livestock breed improvement.

9. A Competitive Audit of Nestlé’s Milo
I plan to produce a SWOT analysis, PEST analysis and a Competitive Audit on Milo. This is
because I’m going to need to produce a good analysis on the market place, if I intend to
create the best marketing strategy. This is important because there are a range of options
available when creating a marketing strategy. Without these analytical processes I will not be
able to identify which strategy is appropriate.
I am going to produce a SWOT analysis to find out how effective Milo is operating and what
internal factors may influence its success. A SWOT analysis analyses the internal factors that
may influence the success of a business. The initials SWOT stand for:
 Strengths
 Weaknesses
 Opportunities
 Threats
Strengths and Weaknesses are internal factors within the control of the organisation.
Opportunities and Threats are outside the control of the organisation. For example, products
offered by competitors, or market forces such as seasonal fluctuations in demand. It enables
an organisation to plan future activities by considering a number of questions such as:
 What are our Strengths? How can we build on them to ensure that we offer a better
product than our competitors?
 What are our Weaknesses? How can we eliminate them?
 What are our Opportunities? How are we going to use them to attract new customers
or increase the number of products that existing customers buy?
 What are our Threats? How are we going to minimise them so that they do not affect
sales of our products?

10. Here are the advantages and disadvantages of using a SWOT analysis:
Advantages
 Identified strengths (value for money)
 Identified opportunities for marketing
 Identified weaknesses (problems to be addressed)
 Identified threats
 Structure for analysis
Disadvantages
 May contain biases (If based whole strategy on SWOT information without
considering validity of using other marketing tools could cause strategy to fail)
 Results/Importance/Consequences need to be communicated to everyone in company
to make it successful not just more paperwork
 Prone to Human error
 Focus could become too diverse and loose main objectives
Here is a SWOT analysis on Milo:
Strengths
 Only chocolate energy drink
 Unique selling point
 Big sales in other countries
 Part of Nestle (reputation) funds available for prelaunch
 Middle of paper ... ship and adverts in Australia
 Advertising on TV, bill boards etc
 Sponsorships for large sports events
 Last sponsor was the Rugby World Cup
 Buy one get on free
 25% extra free etc
 Boosts performance makes athletes go 25% longer
 Advertisements on T.V, internet websites, bill boards, magazines, etc.

11. CONCLUSION:
To conclude all three process (SWOT, PEST and Competitive Audit) have affected my
strategy and marketing decisions. The SWOT analysis has help me to acknowledge and
comprehend my weaknesses, which will be a benefit because now I know my weaknesses all
I need now is search for a way to eliminate them. The PEST analysis has drawn my
awareness to the external forces that may have an influence on the product (Milo).
Therefore, when making marketing decisions the factors found will be taking into
consideration. The competitive Audit has showed me where Milo’s competitors are (what
level they are on) which is also a benefit because I can see what I’m up against, what I have
to do to get ahead and whether I’m disadvantaged in anyway. This is very important in the
competitive environment because as a competitor, you cannot allow rivals to gain advantages
in any form or way.
Suggestions and recommendations:
 As Nestle is the best company all over the world but there is some recommendations
and suggestions;.
 Their prices are little bit higher so they should low their prices to increase their
customers.
 About 70 % people use their products why the rest don’t use them they should
conduct survey and concentrate on those facts why they are not using their products.
 They should also improve their advertising. Their advertising doesn’t pay long-term
effect in the mind of customers.
 About 17% people are not satisfied from the taste of Nestle so nestle has to improve
its taste.
 Due to a great demand of nestle Milkpak now a days there is a shortage of nestle milk
in shops sometimes they have to consider this aspect too.
REFERENCE:
https://www.nestle.in/aboutus/allaboutnestl%C3%A9