SCHOOL YEAR : 2009 2010 Creation Date : October 2009 Distribution Date : November 2010

STUDENS NAME

Katharina PETER Anne-Valrie PRUNIER Aleksandra RYBARZ Turul TUFAN Yue ZHAO

MODULE TEACHERS NAME PROGRAM

Marketing Mix Strategy Laurence COGAN ESC MIM 1, Anglo Group 2

ContentI. Nestl company.......................................................................................................................4 A. History................................................................................................................................4 B. Founders and Current management....................................................................................5 C. Incorporate vision and mission...........................................................................................5 D. Capital and stockholders....................................................................................................6 E. Product families..................................................................................................................6 II. Firms marketing metrics.......................................................................................................7 A. Evolution of sales...............................................................................................................7 B. Evolution of profits............................................................................................................7 III. External environment ...........................................................................................................7 A. Market segments................................................................................................................7 B. Competition and market shares..........................................................................................8 C. Political and legal environment..........................................................................................8 D. Internal environment : Strengths and weaknesses.............................................................9 IV. SWOT Analysis..................................................................................................................10 V. Product policy analysis........................................................................................................12 A. Levels of product .............................................................................................................12 B. Analysis of the brand........................................................................................................13 C. Analysis of the packaging................................................................................................13 D. Products market share.....................................................................................................15 E. Direct and indirect competition........................................................................................15 VI. Pricing policy analysis........................................................................................................15 A. Pricing objective and pricing policy................................................................................15 B. Value of NaturNes (4 to 6 months)..................................................................................15 C. The different costs of NaturNes for customers................................................................17 D. Range of pricing in the retailing stores............................................................................17 E. Range of competitors prices.............................................................................................18 F. Competitors policies........................................................................................................18 G. The different factors which influence price formation for NaturNes...............................19 1. Internal factors..............................................................................................................19

2. External factors.............................................................................................................19 H. Estimation of price elasticity from target markets buying intentions (in ) ..................20 VII. Distribution policy analysis...............................................................................................21 A. Suppliers...........................................................................................................................21 B. Channel levels and intermediaries....................................................................................21 C. Types of retailers: off and online.....................................................................................22 D. Exclusive, selective or intensive......................................................................................22 E. Merchandising..................................................................................................................22 VIII. Promotion policy analysis................................................................................................24 A. Selected Media for advertising.........................................................................................24 B. Examples of advertising and objectives...........................................................................24 C. Types of promotion..........................................................................................................24 D. Types of Public Relations ...............................................................................................25 E. Types of Personal Selling:................................................................................................25 F. Push or Pull Strategy:.......................................................................................................25 APPENDIX..........................................................................................................................27 Appendix 1: The current organization of Nestl..................................................................28 Appendix 2: The different brands of Nestl.........................................................................28 Appendix 3: An example of a TV ads of NaturNes.............................................................30

I. Nestl company Today, French women are joining the workforce more than the past, they have less time to cook for their children. Therefore, there is a huge demand for baby food products. As a result, the baby food market in France has a big possibility for growth. Between 2001 and 2006, the French market has grown at an average annual rate of 2.6%. Moreover, according to different researchs made, French people are the world's largest consumers of baby foods, buying about 95 kilos of baby food per year. As a result of this evolution and growth in the baby food market, we have chosen to analyze the infant nutrition industry and more especially the brand Nestl NaturNes.

A.

History

The history of Nestl began in the mid-1860s, when Henry Nestl, a Swiss pharmacist, started to do experiments with different combinations of milk and other ingredients in order to create a new product, substitute of natural mothers milk. He wanted to decrease the mortality among the children, whose organisms did not accept the natural milk. As a result he invented a new product which was called Farine Lacte (flavor with milk). His first target customers were babies who did not accept any kind of milk and had no right to survive without it. This innovation in a short period of time became a best-seller in Europe. In 1874 Nestls company, which was set in Vevey, was bought by Jules Monnerat, who extended the production by adding the condensed milk. The beginning of 19s. century was a time of fast development. In 1905, there was a first merger with Anglo-Swiss Condensed Milk Company. In 1907, the Company began full-scale manufacturing in Australia, its second-largest export market. Warehouses were built in Singapore, Hong Kong, and Bombay to supply the rapidly growing Asian markets. During the World War I the demand for milk increased significantly. As a result Nestls production had more than doubled. Ironically, the World War II emerged the best time for introducing the new product. For example, Nescafe was the basic drink of US military). Annual production levels reached one million cases by 1943. The time after the war was a dynamic phase in Nestls development. In 1947, the company merged with Alimentana S.A., the producer of Maggi seasonings and soups. The company strengthen its position on the market thanks to the round of acquisitions: Crosse & Blackwell (1960), Findus frozen foods (1963), Libby's fruit juices (1971), Stouffer's frozen foods (1973), Alcon Laboratories Inc. (1975), Carnation, San Pellegrino (1997), Spillers Petfoods (1998), Ralston Purina (2002), Mvenpick Ice Cream, Jenny Craig, Uncle Toby's, Delta Ice Cream, Novartis Medical Nutrition, Gerber, Sources Minrales Henniez.

From 2007 Nestl cooperates also with chocolate maker Pierre Marcolini who is a strategic partner of the company.

B.

Founders and Current management

The founder of Nestl is Henry Nestl (1814-1890). The current management1: Chairman of the Board of Directors, Nestl S.A.: Peter BRABECK-LETMATHE Chief Executive Officer, Nestl S.A.: Paul BULCKE 1st Vice Chairman: Andreas KOOPMANN 2nd Vice Chairman: Rolf HNGGI Chairman's and Corporate Governance Committee: Jean-Ren FOURTOU

C.

Incorporate vision and mission

The most important aim of the company is to create value that can be sustained over the long term by meeting consumer needs for nutrition, enjoyment, and quality they can trust. Nestl creates products which are a response to the customer demand. That fact, indeed, has a great influence on composing new lines of products. The customer is in the centre of attention and he/she is a direct inspiration for the company. Nestl is an international company, which operates in many countries in the world. As a consequence the company has to adjust to the different legislation. Nestl emphasizes that, as a minimum, its employees must comply with the laws applicable in the countries in which it operates. Additionally, it introduces in each subsidiary the International Labour Organisation Conventions and the International (WHO) Code of Marketing of Breast-milk Substitutes, which are the globally recognized and accepted documents. Nestl fully respects the human rights and ensures that its own companies are not complicit in human rights abuses. It also establishes good relations between the company and its employees. For Nestl, the employees are the most valuable asset without which the company could not exist. The company has many subsidiaries in the countries where the child labour is a very huge problem. Nestls policies totally forbid to employ children before they have reached the legal age and they have completed their compulsory education, as defined by the appropriate authorities. The company does not cooperate with the suppliers which use children as the workforce.

1

Cf Appendix : The current organization of Nestl

The protection of the environment is also a part of the companys mission. It introduces new environmental friendly technologies which reduce the risk of disruption of the environmental balance. With the Nestl Water Policy, the company wants to protect water as it is an important resource for making its products.

D.

Capital and stockholders

In 2006, the shares were 267 555 249 euros worldwide. Compared to 2006, the shares in 2008 amounted to 253 949 396 euros at the end of 2008. Due to listing no more than 100 000 000 registered shares with a nominal value of 0,07 euros each, the share capital increased totally for about 6 630 533 euros.

Nestl company:

ItemCapital expenditure as % of sales Market capitalization (end December) Earnings per share Dividend (proposed)

Figure3 232 million euros 0.044 99 846 million euros

3,12 euros 0,9 euro

E.

Product families

Nestl offers a wide range of products, which meet consumers needs. They are divided into eight different groups which includes many different brands of food and beverage2. Summary of the different markets where Nestl is present:

2

Cf annexe 2 : The different brands of Nestl.

II.

Firms marketing metrics

A. B.

Evolution of sales Evolution of profits

In 2008, the turnover of Nestl amounted 72.87 billion euros, plus a net profit of 11.93 billion euros. III. External environment

A.

Market segments

The French baby food market is the biggest in the world. In France, each baby eats in average 95 kg of baby food per year. Furthermore, it is still an increasing market due to the fact that more women are working. Therefore, they do not have that much time to prepare healthy food for their baby. In general, women are the first target of the crisis. In fact, women are the first one to lose their job and then become housewife. The fact to be unemployed for the baby food industry has two main effects: First families will spend less money on baby food products. They will prefer cheaper brands in order to save money. Then, mothers will have time to cook and to prepare healthy food for their tot. As a result the demand for different convenient food is very high. In general the French market has about 2 million consumers and represents about 471 million euros. Developments of new food technologies are mostly driven by Nestl and Diepal-NSA

(Danone with Bledina). They have created a new types of food, new packaging and new recipes. The French market is composed of four main parts: 40% for the baby milk market, 35% for the packaged food in little jars, 10% for breakfast and dry food and last 15% for juices and fresh products. According to some research made by professionals, customers would like to have baby food with biological products for a good price. People care more about their health and also about their wallet. They want to eat biological products with a good taste and good quality as well. Their worries are even worse when the products are for their baby. They have high expectations for the quality and the price.

B.

Competition and market shares

Nestl is one of the leaders on the baby food market in France, just after Danone. In 2007, it had 33% of the market share. The unquestionable leader on the market is Danone which two years ago had 62% of the market share. Its brand Bledina is the most popular brand in the baby food industry. Also Hipp, a German company, is on the third place in the baby food industry; but in comparison to Nestl and Danone its market share is not significant enough (about 1%). The rest of the market share belongs to companies which are not the high-powered competitors for Nestl (It is the case for retailer brands).

C.

Political and legal environment

Therefore that the French market is a highly valuable market some foreign companies try to enter it with their products. But unfortunately for them, France has very high regulations and restriction for the import aliments to the country. This means for example that meat that is not produced in a EU certified slaughterhouse can not be imported. Furthermore there are certain taxes that are calculated in according to the number of the ingredients of the product. Those are high entry barriers for foreign companies on the French baby nutrition market. Apart from this, on the market for organic products there are certain certifications available for the food producer. Parents therefore can be sure that the government created a legal and controlled protection for organic food, to a sure that no genetic modified ingredients are in the

food, that no pesticides are used and that processes are environmentally friendly. For

example:

which respects European regulations, national and international

Other important factor of the legal policies concern the maximum ranges of chemicals within baby food as well as in other grocery products, for example the level of preservatives, dyestuffs and flavor enhancer. This is getting more and more important because further research showed that those additives might make sick, influence the bodies development process and are unhealthy. At the moment there are no regulations by the state but consumers are getting more aware of those food problems and demand products which contain less or none of those chemicals. Governments might release policies regarding this issue in the future when there is enough prove dangerous implications.

D.

Internal environment : Strengths and weaknesses

Nestl NaturNes is the one of the strongest brands on the baby food market. The prestigious image and the wide range of products are undoubtedly the greatest strengths of NaturNes. Forty different dishes for children from 4 months to 1 year fully satisfy customer needs. The company takes care of the babies health and safety. The panel of experts constantly controls the production in order to remain the products up to the standards. The advanced technology of food preparation and the environmental friendly packaging stand the company out of the competitors. Nestl is the first company to have introduced the plastic containers, which are fully recyclable. The food consists only of organic ingredients prepared in a way which does not change the taste of the biological products. Nestl NaturNes success is based also on the promotion which plays a great role in the companys strategy. The particular target market demands a specific promotion. Thats the reason why the products advertisements appear mainly in magazines for parents and medical magazines. Additionally, the whole campaign is supported by sales and point of purchase promotions. Of course like every other brands, NaturNes has some difficulties. Because of the nature of the market, product life cycle is shorter than the other food products. This is why, without innovations our brand can lose its high position among its competitors. The product is common, so it has to be constantly improved to differentiate it from the other products on the market. Nestl NaturNess, in spite of its good image, has only medium quality. The price also seems not to be encouraging as Bledina, the main competitor of NaturNess, has much lower prices for the same kind of products.

IV.

SWOT Analysis

Strengths: 1. One of the market leaders in the baby food industry in France (33% of a market share) 2. Wide range of products (40 different dishes for children from 4 months to 1 year) 3. NaturNes as an organic food is richer in vitamins, minerals, and fibre and retains the level of nutrients for much longer 4. Delicious flavor 5. Products are up to the standards 6. Prestigious image 7. Advanced technologies of food preparation 8. Innovative environmental friendly packaging 9. Strong communication with the customer (Magazines for parents, medical magazines, posters, Internet, sales promotion, POP) 10. Intensive distribution (products are within the customers reach) Weaknesses: 1. Product cycle is short 2. High costs of distribution and promotion 3. Limits of product development 4. People are not conscious about organic food. 5. Price is higher than the price of the main competitor Bledina Opportunities: 1. Organic products which are really popular nowadays 2. Production and distribution of new products 3. The greater demand for baby food as a result of the population growth Threats: 1. New competitors brands on the baby food market 2. New competitors products

3. New needs of the customers 4. Global crisis

V.

Product policy analysis

A.

Levels of product

The core benefit of the product is the meals for babies for the age of 4 month to 18 month. Actual Product: The actual product however contains 40 different recipes from fruits to vegetables to real meals with meat, fish or potatoes in it. The product is available in 2 or 4 jar packages. Nestl launched the product under the brand NaturNes but still with Nestl family brand. This was necessary because the product is based on natural ingredients and special cooking procedures to keep the special taste and texture of aliments. Consequently Nestl launched a high quality product, to attack their greatest competitor Danone. Therefore this product is organic and nature, which allows to attract especially parents who care about biological products, the environment and also the sustainable processing. (Style Packaging Brand name Quality level)

Augmented product: Nestl has launched a baby webpage and a special natures webpage. On this sites mothers can exchange or gather information about baby nutrition, and also get information on all the Nestl baby products, with all the different ingredients, preparation and use occasions.

B.

Analysis of the brand

Physical Fact - natural colored, textured and tasty baby food - reclosable plastic container

Personality - a young feminine person, - caring about health, nutrition and environment

Relationship - trustful, ecologic sustainable for environment and baby

Culture - western, new hype of ecological importance regarding the product and the producing company

Reflected consumer - caring parent, who care about organic food for their children - want healthy baby nutrition

Consumer metallization - cares about environment, but no alternative late 68 - does likely to spend money on value

C.

Analysis of the packaging

1. First level of the packaging NaturNes Baby food comes in little plastic jars which contain from 130g to 200g biological baby food. Every jar has a lid so that it is reclose able. Therefore it is easy to use and practically.

2. The second level of the packaging The little containers come in 2 or 4 paper wrapped packages

The packaging in general involves ecological bright colors like white and light green, which represents the nature in the jars. Additionally there is the big logo placed right in the middle of the lower edge. Furthermore on the right upper corner, there is always a little teddy bear sign with the data for which age the meal is appropriate. The fruits, vegetables or other ingredients are shown as very natural and very appetizing. On the top of the packaging the consumer can find important information about the product. This means that Nestl describes the cooking procedure and stresses out that all the ingredients are a hundred percent natural, and with no preservatives, dyestuffs and gluten. The backside of the carton shows further information about the nutrition regarding energy of the product and again the information that the product does not any additional sugar. Part of the augmented product is the little where it sais how to contact Nestl bb or internet web page. There also is a hint to the Nestl baby webpage. the contain sign via phone

Packaging: Materials, Graphics, Colors, Letters and Text, Size and Variety. The global message of the packaging is coherent.

The logo The logo consists basically of the letters of the NaturNes writing in blue. The writing in general is a little bit brandish, so that it is more kids related. On the left side there is a figurative icon in shape of a flower, this emphasizes the natural background of the product. The Nestl manufacture brand is in the middle of the container. The whole logo is coherent with the organic baby jar food that it stands for. In our opinion, the logo is not really a logo but it is more a writing, which basically is not bad but as sign of recognition a little bit too big. But if the brand is getting stronger in the future

than it is possible the little flower on the left edge of the brand name is symbol enough to suggest the consumer what the product is about.

D.

Products market share

E.

Direct and indirect competition

Nestls biggest competitor is Bledina from Danone. This is a low price product which is available in every supermarkets. Danone provides with is assortment a full baby meal service. Like Nestl they have a stage system so that food is special proceeded for different ages of the baby. On the other hand there are many trade brands, such as Carrefour, which is a brand even cheaper than NaturNes. Furthermore, NaturNes has not only competitors outside of Nestls company. There are also different brands that belong to Nestl like Moi tout seul, Ma recette or Ptit souper/ Ptit Du. But all those other brands have not such a complete range of products and are not that special as NaturNes. VI. Pricing policy analysis

A.

Pricing objective and pricing policy

The general pricing objective for the company is to create a value which will be acceptable by the customers. The price is an important step in the marketing mix for NaturNes because it reflects the intrinsic value of the product. A wrong pricing is a barrier for the consumers. In fact, if it is too expensive, consumers will not buy it. If the price is low, customers will perceived NaturNes as a bad quality product or they will buy it, but the company will not have enough profit to resist on the market. The pricing decision, is the most difficult decision. It is the reason why before setting prices, Nestl had to do some research on customers values and on the existing products available on the 4 to 6 months baby food market.

B.

Value of NaturNes (4 to 6 months)

From the customers point of view, the value of the product is the difference between benefits which are gained and the costs which are born. The main benefits of NaturNes for customer: Prestigious image of Nestl: Nestl, through its experience emits a prestigious image of the Brand. By buying Nestls products, consumers think directly that products are made with a really good and high quality.

Quality: Consumers are reading the ingredient labels of their food and beverage products more closely than ever. People care for their health and even more when it is about their childs health. It is the reason why the products NaturNes are made with fresh fruits and vegetables, 100% natural, with no sugar or salt added. Also it helps not to overload the organism. The recipes have been created by experts in order to meet the highest nutritional standards and to ensure that the food tastes great. A novel steam cooking technology was developed by Nestl to preserve these qualities. For Nestl it is important to have a balanced diet. Choice: Nestl proposes a wide range of products. In fact, the product NaturNes is present with different types of flavor. (from Artichoke, Peas, Courgettes, Beans and peas, Carrot and pea, Carrot and pumpkin, Vegetables, pasta and wheat, Vegetables and wheat.)

Practical of the container: Personal benefits. The lid allows consumers to keep the food fresh and to keep it longer in the fridge. It is also a gain of time, consumers will not have to transpose the food in a container. Also, consumers will not have to clean as they can throw it directly in the garbage.

Environmental improvements: Packaging is made in plastic bowls with replaceable lids. The plastic bowl packaging is more environmentally friendly than glass food containers as it requires less energy to manufacture. (Marketing, 29th of October 2008) Also, the packaging reduces the energy consumption and the emission of greenhouse gases. By buying NaturNes, customers will feel ease to have done something in favor of the environment. The environmental friendly is a behavior which is more and more in expansion, so it is a good strategy for Nestl to get this market.

Gain of time: Parents do not need to cook. They just have to warm it up and it is ready for baby. It is a market in expansion because more and more women are working and

they do not have time to cook for their child. They prefer gaining their time buy buying those products.

Customer service : The company is willing to answer all the questions which the customers have. They build the strong relation between the company and the customer.

C.

The different costs of NaturNes for customers

There are two types of cost for NaturNes: the time costs and the monetary costs. Time costs: In the twentieth century time is an important value for the people, so high availability of the product is a necessity. NaturNes has a high penetration, the product is available everywhere. If customers want to buy the product they could go to the nearest supermarket to find it. They do not have to spend time to search for it. Monetary costs: NaturNes is a product which is middle ranged. That means that almost everybody can afford it. The only thing that consumers have to do, is to chose the flavor and the brand because there is not so much difference between other brands (The packaging plays in important role for the choice of the product).

D.

Range of pricing in the retailing stores.

To understand the pricing difference between the retailers, we have examined the prices of NaturNes Carrot (4-6 Months) for offline distributors (Intermarch dAbroumont, Carrefour Quetiny, March Plus Bannelier) and one online distributor (www.paradisdesprix.com). Here are the results:Intermarch Paradisdesprix.co m NaturNes Carrot 1,30 1,44 Carrefour Quetigny 1,45 March plus 1,45

The price of NaturNes carrot (4-6 months) varies according to the place: from 1,30 to 1,45. The lowest price is in Intermarch and the more expensive one is in March plus. But in fact we can say that prices in all the retailer stores (Intermarch is an exception) are the same, because Nestl wants NaturNes to be available everywhere. Consumers do not have to go to mall out of the city for buy NaturNes. When we think that their customer are working mothers, this strategy is the best option for NaturNes.

E.

Range of competitors prices.

The NaturNes flavor carrot is the most expensive product among companies which produce baby food. We have compared NaturNes carrot products with other well known brands whose products are quite similar to ours. Here are the results:BRAND MAIN INGREDIENTS Bio Babybio NaturNes Carrots Carrots 2*130g 2 x 130 g 2 x 130 g 2 x 125 g 2 x 130 g 2 1,45 1,35 1,30 1,20 WEIGHT PRICE THE DIFFERNCE BETWEEN PRICES (%) + 37,9% -6,9% -10,3% -17,2%

Carrefour Carrots & potatoes Hipp Bldina Carrots & potatoes Carrots

The difference between the two market leaders (Bldina and NaturNes) is quiet small but it is still in important difference, especially during the crisis time. In fact, people are more and more careful than ever for their purchases. Despite the fact that their products have generally the same ingredients and the same volume, there is a difference between prices which amounts 0,25. It means that the price of Nestl NaturNes is higher for about 17,2%. The main cause of this situation is the fact that Danone is a very big manufacturer which uses the price as its main marketing tool while NaturNes is using quality of product. Surprisingly Carrefours price is lower for only 6,9%. The retailers brands seem to be the cheapest one, but as we can see that is not a principle. The difference between NaturNes and Bio Baby Bio can be explained that all the products buy by Bio company are really expensive and the company needs to sell at higher prices if they want to get a profitable margin.

F.

Competitors policiesBldina is the market leader on baby food. Consumers associate the brand with its history. Because of its financial strength, Bldina can provide the product with the lowest price.

Carrefour and Leclerc are retailers brands. They are outsourcing the production of their products. Because of their lowest costs, they can provide the product with low prices.

Hipp, the German manufacturer is using pricing policy which is oriented to find a balance between quality and price. This is the reason why they have a middle range pricing policy.

Babynat is subject to the very strict specifications of child regulations. They select the best products from the South West of France. Very good quality but very expensive. Respect the environment and the rights of the humans being.

G. The different factors formation for NaturNes1. Internal factors

which

influence

price

Marketing objective Nestl would like to become the leader on the baby food market. In order to achieve this goal, the company created the line of products which are made for each age group of babies; wide range of products and flavours is the first step to gain new clients; the additional advantage is the price which is lower than the other organic products.

Marketing Mix strategy Product NaturNes has a wide range of products; it offers forty different dishes for children from for month to one year. Price the prices are set on the middle level and are lower than the other organic products. Promotion it uses such marketing tools as: sales promotion, ads in magazines for parents and in the internet. Place the products are available mainly in the supermarkets e.g. Carrefour, Intermarch. 2. External factors

Demand elasticity

The demand for NaturNes products is sensitive. In fact, it can be explained by the fact that NaturNes products are common to the products of the competitors, with a similar price. Moreover, the quality is not so different from the quality of the competitors. NaturNes brand is well known, but it does not have an exclusive image. It is perceived as an ordinary product by customers. Baby food market profitability encourages new companies to invest in this sector. It means that NaturNes do not have the monopole to produce such products as baby food is available in every single supermarket and in spite of introducing many innovations, each product has its substitutes. NaturNes has a middle range price. This is not a very good way to attract customers. Industry structure

In 2007, Nestl had 33% of the market share. It means that it is not a leader on the market, but it is still a significant player among baby food producers. The brand is well known and the sales are high, thanks to that the company can set higher prices than its competitors.

H. Estimation of price elasticity from target markets buying intentions (in )According to the survey which was conducted on 53 customers principally people with children the price of Nestl NaturNes Carrotes is quite elastic. The respondents were asked to decide how much they would be able to pay for such product (a maximum and also a minimum price were required). Our research shows that the actual price is set on the right level, because 100% of the customers is willing to buy it. We proved also that the price is quite elastic. The increase of the price from 2 to 3 would cause the drop of demand for about 50%.

100% of potential customers would by the product if prices were between 2 and 2,50. 70% would buy it if it was 3 maximum. of them

50% of them would buy it for 3,5 maximum. VII. Distribution policy analysis

A.

Suppliers

Today executives have come to realize their customers' satisfaction - or dissatisfaction - was linked to the performance of their supply chain. supply chain management (SCM) is "both a source of competitive advantage and a lever for profit margin. Nestle defines SCM as the two-way management of the flow of goods, services and information from suppliers to manufacturers, wholesalers, distributors, stores -- to the end user. SCM is especially critical for the food industry because of the ease of spoilage. Seen that way, SCM becomes a branding issue. When Nestle places its logo on a product, the logo represents "a seal of quality." Protecting that quality makes Nestle responsible for its entire supply chain. Nestle cooperates with around 165 000 suppliers who are willing to apply Nestles quality standards. In 2008, the company purchased 14.9 billion euros of raw materials. The company created its Supplier Code which specifies the principles of mutual cooperation between Nestle and suppliers. By acceptance of the Code, the supplier commits that all existing and future agreements and business relationships with Nestl will be based on the rules which there are included. To strengthen the supplier chain, Nestle supports operating practices and farming practices. It demands from the suppliers to strive towards improving the efficiency of their operations.

B.

Channel levels and intermediaries

Nestle uses the system of indirect marketing channel (2-level channel). This kind of system is typical for most of the food producers. It contains two intermediaries: wholesaler and retailer. Wholesaler is responsible for distributing Nestle NaturNes to the retailers mainly supermarkets. Retailer has a direct contact with the customer who is the last part of our channel.

C.

Types of retailers: off and online

The Natunes products are sold by off as well as online retailers. The biggest offline retailers are Intermarche, Carrefour, Merche Plus, Auchan. There is also a possibility to buy Natunes by the Internet. We can find the products in the online shops like: paradisdesprix.com ooshop.com chronodrive.com auchandirect.fr houra.fr

D.

Exclusive, selective or intensive

Nestl NaturNes products are distributed in an typically intensive way. This kind of distribution is often used for the products which are common and for which the demand is high. Baby food is a kind of product which has to be available when to customer need it. That is the reason why Nestle Company decided to sell NaturNes products in as many outlets as possible.

E.

Merchandising

Nestl NaturNes is sold in ordinary supermarkets, therefore there are many different products which need to get the attention of the consumers. In Carrefour for example, they had little signs which stood out of the shelf. With this, they try to catch the view of consumers and direct them toward the product. Furthermore they had promotion for getting a discount on the price by buying NaturNes products. (See the picture below)

All of those actions are very important because the shelf where the product is located is very overload with products of the competitor as well as with substitute products from Nestl its self.

A typical shelf in Carrefour is organized as followed.

Cereals Cookies

Baby milk

In general, the products are organized regarding the age of the baby. Starting on the right side with baby milk, to baby food for the youngest (4-6 month), to baby food product for older babies (18-24 month) and finally to products like cereals, cookies and firmer products. NaturNes can be found in several places on the shelf as their product line concerns every age of babies.

VIII. Promotion policy analysis

A.

Selected Media for advertising

Nestl NaturNes mainly targets 25-35 years old young and working mothers. Most of the targets have to time to prepare meal for their babies. Also they are concern about health factor of the food. According to the Medias have the high frequency of target, Nestl decides to organize the media collection as folowing: Television o Channel: National broadcast chanels (TF1, M6 etc.) o Timing: Whole day, specially prime time MAGAZINE o Channel: Mother-Baby magazines.. o Timing: monthly, weekly INTERNET o Channel: Baby care websites, portals

B.

Examples of advertising and objectives

There are 4 types of advertising objectives to recognize a specific task, a specific target, a specific period of time: Informative, Persuasive, Comparative and Reminder Advertising. For the commercial in the annex, Nestl NaturNes wants to make a promotion of a new launched product for babies. This is an informative advertising to introduce new products to clients and to build the primary demand. For achieving this objective, commercial wants to show Nestl NaturNes different cooking style as its most important difference than the competitors. Also the commercial defines three most important benefit of Nestl NaturNes as Omega 3-6, Nutrition and Fresh fibers While commercial gives these messages, consumer can feel natural atmosphere. Also, because of the nature of the product, the commercial is in the Baby World concept. At the end of commercial give the title which contains two main element of product (babyfood and Nature): NaturNes-Nature Generation3

C.

Types of promotion

Retailler in France are main channels of Nestls distribution which has a ultimate control of promotion. Thats because promotion activities of Nestl NaturNes is very limited. Most of the types that NaturNes uses, are:

3

You can see a TV ads application of Nestl NaturNes at Appendix

1. the Intermarch example) 2. 3.

Price discount: Offering a special price for a limited period. (like in

Package selling : Buy the more than 2 jars for cheaper price. Mass display: Spend the extra fee to display in the key places, like

the heads of gondolas, K1 and K2.

D.

Types of Public Relations

The global policy of Nestl NaturNes is to get closer with young mothers. Thats because Nestl invests to a website4 that mothers can find a lots of information about how they can take care about their babies, communicate with other mothers, get information about new trends of baby-care, and read expert articles And also as a corporate social responsibility strategy Nestl make some projects that usually mothers concern about with Nestl Foundation France5 which initiates and supports research in human nutrition with public health relevance in low-income and lower middle-income countries.

E.

Types of Personal Selling:

Nestl NaturNess sales are mainly concentrated on the markets. As the brand has been expanding and adding new flavors to its product range, it also used personal selling like point of purchase activities in the markets. This is also a kind of push strategy: Nestl pushed its new product through personal selling.

F.

Push or Pull Strategy:

Push promotional marketing strategy means that its the company who has to push the product to the consumers; the demand for the product doesnt come from the consumers.Marketing acc. Marketing g ities

Producer

Intermediaries

End users

Demand

Push Strategy of NaturNes The strategy that Nestl NaturNes picked up due to the nature of the baby food market where there are many competitors of Nestl NaturNes is also a push strategy meaning that Nestl NaturNes develops advertising and promotional strategies and tools like wholesale discounts, bonuses etc. towards its marketing and

4 5

http://www.bebe.nestle.fr/ http://fondation.nestle.fr

distribution channels, shortly towards the intermediaries. As there are many competitors on the market, Nestl NaturNes can easily be substituted by another baby food. Its fact that Nestl NaturNes is a brand which is well recognized by the consumers because of its quality product. However, in order to be able to benefit from the brand name and to keep its current position on the market, the push strategy is designed to have the supermarkets, hypermarkets and other small size selling points promote Nestl NaturNes to the end users.

APPENDIX

Appendix 1: The current organization of Nestl.

Appendix 2: The different brands of Nestl.

Beverages Coffee: Nescaf, Nespresso Water: Nestl Pure Life, Vittel, S.Pellegrino. Other: Nestea, Nesquik, Nescau

Milk products Shelf Stable: Nestl, Nespray, Nesvita,Coffee-mate, Juicy Juice Chilled Dairy: Nestl, Yoco.

Ice cream

Nestl, Antica Gelateria del Corso, Dreyers/Edys, Drumstick/Extrme, Maxibon/Tandem, Mega, Mvenpick, Sin Parar/Sem Parar/Non Stop Prepared dishes and cooking aids Bouillons, soups, seasonings, pasta, sauces, noodles: Maggi, Buitoni, Thomy, Winiary, Torchin, Osem, Totole, Haoji Frozen foods (prepared dishes, pizzas, small meals): Stouffers Refrigeratedproducts (cold meat products, dough, pasta, pizzas, sauces, snacks): Nestl, Buitoni, Herta, Toll House Confectionery Nestl, Crunch, Cailler, Galak/Milkybar, Kit Kat, Smarties,Butterfinger, Aero, Polo Professional products for foodservices Chef, Davigel, Minors Nutrition Infant: NaturNes, Nestl, Nan, Beba, Nidina, Nidal, Good Start, Lactogen,Guigoz, Nestogen, Alfar, Mom&Me, Nestum, CerelacHealthCare: Resource, Boost, Nutren, Peptamen Performance: PowerBar, Musashi Weight Management: Jenny Craig PetCare Purina, Friskies, Fancy Feast, Alpo, Gourmet, Mon Petit, Felix, Dog Chow, Cat Chow, Pro Plan, Purina ONE, Beneful, Tidy Cats, Purina Veterinary Diets

Appendix 3: An example of a TV ads of NaturNes

Opening A baby is searching something

A normal baby food, everything is cooking at the same time

but our wise pot does not happy of this

However For Nestl NatureNes

Every ingredient separately

is

prepared

And three benefits ; Omega 3-6 Nutrition Fresh fibers

Are inside NatureNes

Pack Shot Nestl NaturNes Nature Generation