Marketing Environment of Nestle

Marketing Environment of Nestle

In this research work the company chosen by me is Nestle Malaysia. I have tried to cover the brief history of the company, vision, mission and objectives of the company. This brief history and other sub heading under company background is compulsory to be understood and researched well as they form the basis for marketing plan of the company. We have also tried to cover the internal and external micro and macro environments for the company and country for its future growth and further marketing planning strategy. At the end we have proceeded to the 7 Ps of the marketing for Nestle.

Company Background

Today, Nestle is one of the leading Food and Nutrition Company in the world. Nestle has headquarters in Vesey, Switzerland. The business of nestle is supported by its strong network in more than 86 countries with more than 500 factories. Along with that the business also gets the benefit of its international R&D network. The Nestle factories are operating in the different countries of:

1. Asia
2. America

4. Europe
5. Oceania

As the company is in the sector of food and nutrition, it remains sensitive to
Being a company dedicated to food from the beginning, Nestle remains sensitive to culinary and eating habits, and responds to specific nutritional problems, whilst also setting and matching new trends such as growing out-of-home consumption and caring about the wellbeing of its consumers.


Nestle aim is to become global leader in Food and Nutrition Company in the world and sustain that position. This objective of the company signifies that they need to work hard to stay ahead of Cadbury which is recently being acquired by Kraft food. Kraft is world leader in today’s chocolate business and food and nutrition business.


“Nestlé Norden’s aim is to meet the various needs of the consumer every day by marketing and selling food of a consistently high quality.”
To achieve this vision Nestle has two steps to follow, first is High quality and collaboration, which is integral part of any food business to flourish and second is Focus on e-business and websites. Nestle has started investing heavy in development of e business and its promotion so as to capture clients in e business sphere also.


“Nestle is dedicated to providing the best foods to people throughout their day, throughout their lives, throughout the world. With our unique experience of anticipating consumers’ needs and creating solutions, Nestle contributes to your well-being and enhances your quality of life.”
The mission statement of Nestle is well articulated and reflects the long term objective for doing the business. It has mentioned in the mission statement that the company will provide consistently the best food product with the best quality throughout the life of their customers, which will ultimately enhance the quality of the life of its customers. The mission statement put the emphasis on the presence of the company in nearly every country. It promises in its mission statement that the company will understand the need of its customers and provide the best products to fulfill the needs. The mission also shows the high quality which is maintained in the wide range of products of Nestle. The company reassures that they provide the best range of food products to remain the first preference of its consumers.

Internal and External Micro Environment

Internal Environment

Nestle has a rich working culture which motivates its employees to serve best to its customers with the help of the variety present in their product range.
Nestle has included the benefits of the employees in the goal statement of the organization as the management of the company strongly believe that the productivity, quality and the dependability will reflect on the product only if the employees will take care of all these factors.
Different departments of the company work to contribute in the growth of the organization and these departments not only keep the customer’s needs and demand in mind but also keep the same type of attention for the internal customers of Nestle.
The company believes if the internal market of the company is fully satisfied than only the internal market will be able to serve to its customers and able to understand their needs and able to manufacture the products which can fulfill these needs.
Nestle has a strong top management team which runs on strong values and principles of the company. The values of the company give strong focus to integrity, loyalty and team work. The efficient top management of the company is able to run finance, operation, marketing, logistics, sales, and research and development departments with great success which ultimately leads to the fulfillment of the goal of the organization.

Micro Environment
The micro environment of Nestle includes three divisions:

a) Suppliers

Suppliers provide the raw material resources, unfinished goods and labors to the company in order to produce goods and services. The effectiveness of suppliers determines the efficiency of the company in terms of producing the goods. In addition to that the quality of the finished product has a strong with the suppliers of the firm especially in case of food products. As the presence of the company is in more than hundred companies, it is a challenge for the company to maintain its standard all over the world and provide the consistency to its customers in the taste and quality of the product.

Further we can divide the supplier of Nestle into two parts: Labor suppliers and material suppliers. Labor suppliers deal with the quantity of labor is required at the optimum level in order to prevent the loss of labor force and prevent the company from the shortage of labor which again can lead building of inventory as a cost for the company. The skills of labor is again maintained by the labor suppliers, wherein the labors of different skills are managed in such a way that the operation of the firm can run smoothly. Labor strikes and labor relations are other factors which we cannot ignore in the current scenario as the efficiency of the business depends largely on the factors like attrition and employee satisfaction.
Material supplies handle all the material required by the firm in order to manufacture the finished product for sale. Nestle is in the food and quality markets and the quality of such item plays an major role in its success in the market.
Nestle has maintained a high quality efficiency in handling the quality and quantity of the two different supplies i.e. labor supplies and material supplies and hence the company has been able to run its business smoothly for more than 100 years in spite of the different business trends in the world market.

b) Marketing Intermediaries

The market intermediaries of the company help to advertise, sell and distribute its product to the end customers. The physical distribution network of the company decides the medium by which the finished product is delivered to the end customer on time and with safety. This department also ensures the proper storage of the firm that prevents the product from getting any king of damage.

The marketing service department of the firm helps in the promotion of the product and acts as a communication channel between the company and customers. It not only communicates the features of the product to its customers but also get the feedback with the help of survey, which helps the research and development department to develop a product according to the need of the customers.
The other intermediaries of the company like banks help to provide the funds to the companies and play an important role in the continuity of the business. Insurance companies insure the property and the goods of the company against the risk involved in various operations, buying and selling of the product.
Nestle has the differential advantage of working in a smooth coordination with all its marketing intermediaries which helps in providing the best and pure food products to its valuable customers in the different parts of the world.

c) Customers
The immediate customers of Nestle are retail and grocery stores which provide the products of the company to the end customers at a reasonable price and a reasonable profit. The end customers of Nestle are the consumers who consume its wide range of product. The company has a bright brand image in its big pool of end customers.

d) Competitors
Although Nestle is leader in packaged food industry of Malaysia but the other competitors who are giving tough competition to Nestle are

• Petra Foods Limited
• Chocoladefabriken Lindt & Spruengli AG
• Yeo Heap Sang Limited
• Mail Dairy Industry Co., Ltd

Nestle has a clear advantage over the above mentioned companies is its presence in Malaysia for over a century now. Nestle has been able to setup a good and trusted distribution channel and a huge retail network. The trust worthiness gained by Nestle among the Malaysian people is build in decades on hard work and quality products and varied range of prices, thus even after facing stiff competition with the above mentioned companies in chocolates, dairy products and other packaged food products the company is able to maintain the bottom lines of its profit and loss statements attractive for its investors and good image in public.

e) Marketing
The basic marketing strategy of the Nestle was to develop brands for each their product instead of focusing on making brand value for the entire company, thus never allowing cannibalization of products and gaining multiple brand value for the entire company. The vision of the company could be summarized in following statements
• Be the leading multinational company in food, nutrition and wellness.
• Produce and sell world-class products of the highest consistent quality, reliability and convenience based on business excellence principles throughout our operations.
• Maximize the use of good quality local raw materials
• Be an exemplary employer with a progressive human resource and social policy; with a management style that is based on “Management Commitment and People Involvement”
• Be a responsible corporate citizen, fulfilling all obligations to Government, shareholders, customers, communities and consumers.
• Protect the environment by being committed to environmentally sound business practices, and taking into account the need to preserve natural resources and save energy.
• Guarantee that all products manufactured, imported and distributed by Nestlé Malaysia are certified HALAL by authorized Islamic certification bodies.
• Deliver shareholder value through the achievement of sustainable and profitable long-term growth.

Adhering to the above vision statements the company has been able to maintain the marketing and branding unique and ahead of the competitors.

Macro Environment

Macro environment include following environment of the country
Political Environment: government of Malaysia has never imposed any political pressure in fact they have always supported foreign investment and foreign businesses to grow in Malaysia. As the company is into food and nutrition business they have to just adhere to the laws of food and nutrition policies of government and constantly provide good quality which is the vision and mission of the company thus Nestle never faces any problems on political front.
Cultural Environment: Malaysian culture is no doubt of having light food at constant intervals and young crowd of Malaysia likes to have good nutritional food thus Nestle has great scope there.
Economic Environment: the disposable income of country and the high living standard of Malaysia always give better bigger business opportunities for Nestle.
Technological Environment: Malaysia is technologically rich country both in terms of availability of technology and also the technological work force the highly skilled and educated manpower is abundant in Malaysia.
In case of Nestle and the product offered by the company these factors do not create much impact in general scenario. However as we have seen the major events like World War had created a positive impact on the sale of confectionary products of the company. The culture has some impact in this company as whether the country has most people as vegetarian or non vegetarian the consumption of milk products is always there. However the countries where the people are more dependent on milk products are profitable market for Nestle.

Key Success Factors

• Consumer Insight: To sustain success the company must have insight of the customers changing needs, you have to be dynamic and innovate and Nestle has been able to do this for last couple of decades.

• Continuous Improvement Programs: Continuous improvement includes innovation in launching new products but equally important is improvement in quality to be better than competitors, improvement in distribution channel which will help Nestle to be at the top.
• Regionalization: the regionalization means the regionalization of products and raw resources procurement which means that the company will run like independent entity in each divided region with its own targets and resources.
• Development of People: Every company’s responsibility is the development of its employees as that brings good will factor among the employees and which results into lower attrition and higher productivity.
• Social Responsibility: this is about creating good will among the people where you operate, about the society which helps and allows you to grow and use its resources and at last the protection and responsibility regarding environment.