Nestle Australia Is Food And Drink Products Supplier Marketing Essay

go up Australia Is Food And Drink Products Supplier Marketing try1- IntroductionLaunched in 1867, Nestle Australia Ltd is a supplier of food and drink wares. It also provides a wide range of dairy take out outputs, noodles in numerous flavors, chocolate, frozen meals and coffees. Besides, it provides a variety of cold and hot drinks, light ice-creams and a variety of confecti binglery and bakery items. Nowadays, Nestle Australia offers catering services to cafes, restaurants, hotels and clubs. Other mathematical products that we entrust put a spot-on in this report argon yogurts, fruit yogurts, and flavored milk and yogurts. Nestls brands include Kit Kat, Nescafe, Nestea, Ortega and Crunch. Nestle provides also pets foods such as Purina. The keep company launched a joint venture with General Mills in more(prenominal) than 80 countries. (One Source, 2009)HistoryAt the beginning Henri Nestle has developed milk for babies who are unable to drink and to feed from their mothers , after five eld this product was sold around the world as a food for babies and old wad. In 1906, Australian market place became the second gravidst market for Nestle and was served by many of retailers and sales agents. The best masterment in Australian market was in 1934 by the invention of impudently product MILO. (Nestle, 2009) Nowadays, this product is sold in more than 30 countries with sales of more than half Billion Australian dollar. In 1999, Nestls head office in Sydney became the headquarter for Oceania region which includes Australia, New Zealand and Pacific islands.Principles and ValuesIn the whole life of Nestle (135 years), Nestls basic approach to course was the foundation and the maintenance of ache term cheers for consumers, shareholders, employees, society and community as a whole. Nestls major principal is to maintain a long term business improvement and development. (Nestle, 2009). Nestles major values are the following Long term development Long term relationships Integration and reacting with different cultures The ac make loveledgement that customers earn instruction about the company besides the product that they bought Ethical values are basic requirements for our employees and senior report managersThese values and principles have been translated into more than forty languages around the world, and it is must that all Nestles mangers should recognize and apply these values in their career lives, and these values are given by training to the refreshful employees.Nestle AustraliaNestle also is separateicipating in the Oceanias community which is identified by its mixture and diversity of economic conditions, cultures, believes and tastes. We became a vital part in the community in which we activate as an employer and as a supplier to the local area. Besides, we were the leaders in many issues such as people wellness and environmental protection. As the largest food and beverage company in the world, we believe that we ha ve a responsibility to customers and we are taking this responsibility seriously. We believe that people should live in a healthy style by doing sports, we are sponsoring many sports howeverts and we are always encouraging people to get active. In addition, d unity our agreement with the Australian Institute of Sport, we are improving children to get their knowledge and to understand nutrition.Mission StatementWhen you read Nestles mission statement the following spoken language jump to your mind Research, good food, health and wellness. Our products bring to consumers the best tastes and pleasures. Research is the masterpiece of Nestles heritage and an important element for our companys future. We still know that there is some(prenominal) mysterious information about health and wellness had not been discovered yet, that is the reason that we are still searching for answers to bring unspoiled Food for Good life. (Research. Nestle, 2009).Nestle WorldwideToday, with more than 480 factories and 265,000 employees in 87 countries in all over the world Americas, Africa, Middle East, Europe and Australasia, Nestle is considered as the largest food and drink Company all over the world. Nestle Oceania in Australia, New Zealand and the pacific island is hiring more than 5,500 employees, with more than 20 factories and four distribution centers owned and managed by the company. ascribable to Nestls multinational reputation, and despite the tough market conditions not wholly in Australia but worldwide, and overdue to Nestls convenient place in Sydney and due to the high qualified employees and the brilliant companys strategy, Nestle dad been ranked number one among all food suppliers in Australian market in 2008 (Nielsen Report, 2008). In 2008, for Ice-cream, yoghourt and coffees categories, Nestls sales volume was more than AU$200m for each category.5% Employees Turnover RateMore than 6,000 Brands and 10,000 ProductsMore than 480 Factories in 87 Countries e very where than 265,000 EmployeesAnnual Sales more than 103 A$ billionWorld Leading Food and Beverage CompanyNestleFigure1, Nestle Worldwide. Source Nestle, Australia, 2009.2- Situation digest2.1- Internal AnalysisNestle Australia is considering the market leader in food and beverage sector in Australian market with overall sales more than , involved in more than 20 industries such as Chocolates, yoghurts, ice cream, milk, dairy deserts coffee , confectionery and frozen meals. Nestle Australia has launched more than one hundred brands Coffee Mate, Nescafe, Uncle Tobys, Nesquik, Maggi, Drumstick, Quality Street and Peters are only examples of Nestls brands in Australian market. Referring to Nielsons 2008 report, Nestle was ranking high among its competitors in ice cream, milk and yogurt fields which could be a very good indication for initiation our forward-looking product that we leave aloneing discuss later in our trade jut out.Referring to the Retail Australias 2009 grocery mag azine we ordain find the followingFor Chilled diary category, Nestle value share was about 14.2% in 2008 comparison by 16.8% for the anterior year.For Dairy Desserts Category, Nestle value share was 25.2% comparing by 25.3% for the previous yearFor Chilled Diary category, Nestle value share was about 14.2% in 2008 comparing by 16.8% for the previous year.For Yoghurt category, Nestle value share was 11.8% in 2008 comparing by 15.8% for the year above.For Drinking Yoghurt, Nestle is not involved in this market yet, only the following companies are in this market Yakult, Jalna , Bulla and some other small companies.As an overall trend, we could realize some lineage for Nestls volume trend in some industries and categories. This decrease was a natural impact of the huge affect of the global financial crisis as we go away describe in the next chapter .Due to this crisis, customers might buy some products instead of Nestls ones or they might even reducing their purchases for some items.2.2- Macro environmental Analysis (PEST Analysis)EconomicAfter several years of flourish and high economic offset, The Australian economy suffered a lot in 2008, due to the huge effects of the economic global financial crisis. Australians gross domestic product is declined a reduction in job va buttockscies and a high rate of inflation, all these indicators could lead to an change magnitude in food and beverages pricesSee figures 2 3 for Australias GDP and Un custom Rate in 2007, 2008 and Jun 2009.(GDP growth reached 2.7% in Jun 2008 comparing by 4.3% in Jun 2007)Figure2 Australias Unemployment Rate- Source ABS, 2009Figure3 Australias GDP Growth rate- Source ABS, 2009SocialDespite the lack of confidence for Australian consumers, Australia becomes one of the well-nigh optimistic countries, as in 2008, Australia was ranking as one of the most confident countries all over the world with an index score 104, 20 points higher than the world average.. (Nielsen, 2008). Generally R etail growth in 2008, 2009 stay slow, and consumers became more carefully with their money, they spend more money for dining at- home similar buying foods and drinks from supermarkets and they spend less money for out of home activities like cafes, restaurant and take-away shops. Despite the fact that supermarkets gained a good share with this new customers philosophy, fit grocery sales have been declined in 2008. (Nielsen, 2008). The total retail sales growth reached 5.9% in august 2008 comparing by 7.5% for the same month in 2007.Comparing by 2007, the businesses such as cafes restaurants and takeawayFoods, had record the largest drop in turnover of 6.4%.One expectation of these supermarkets is Aldi. Customers preferred to go to Aldi due to the good prices in addition to the good quality there. Aldi, with share stint more than 22% , had took many dollars away from huge chain supermarkets.PoliticsThis part indicates legal and political situation in Australia. It includes Taxat ion for raw materials bought overseas, employment laws, environmental regulations, political stability and competition regulations. . In my opinion, no other politics issues would affect the launching of our new product due to the currently unchangeable politic situation that Australia is facing now, i.e. there is no war, no revolution or even no elections are affecting Australia at this momenttechnicalBesides the innovation and application of new technology such as the RFID (The Radio Frequency Identification) , the increase in price of raw materials and other cut chain costs could affect the launching of our new product.2.3 Micro AnalysisThe MarketIf we take an overall view on grocery market run year. Referring to the 2008 Nielsen report we testament realize these important following items-An overall declining trend in grocery market, with sales growth 5.9% comparing by 7.5% as we mentioned before, which is a normal consequences due to the new situation consumers tightening th eir belts-.Drinks and confectionery are only the two sectors that have achieved an increase in growth for 2008, with 3.3% and 7.5% respectively.-The largest growth achieved was in dairy sector by increasing more than 7.6%.The most important sector in this report is the Chilled Diary , since our new product( which we leave behind discuss it in this chapter) is a sub category for the Chilled Diary part.In 2008, and despite the financial crisis, this sector achieved an AU$996.5m grocery value with an increase of 3.5% comparing by 2007. This indicator could be a high motivation for Nestle to increase its market share in this category (See Figure 4 5)Figures 4 5 Australias Chilled Diary Market Corporate % Shares for 2008 2007 . Source Australias grocery magazine, 2009.Referring to the above data, we could recognize that there is a large advantage for Nestle to increase the profit by investment in confectionery or drinks sectors, especially in dairies products.The ProductOur new produ ct would be categorized under the Drinking Yoghurts category.(We provide discuss the product briefly in the next two chapters).The Drinking Yoghurts value market in 2008 reached a A$52.3m with an increase of 5.5% comparing by 2007. This market contains only 3 major companiesYakult with 67.7% value share (The market leader in this category)Jalna with 10.6% value shareBulla with 4% value shareAnd Private judge with 16.8% value share.Figure 7, Australias Drinking Yoghurt Market Corporate % Shares 2008Source Australias grocery magazine, 2009After all the above reasons, we could conclude that there is a big opportunity for Nestle to enter this market and it would obtain a very competitive topographic point among the other competitors.Target Market and Market SizeIn this market plan we go away focus on children, youths and adults which are the majority of Australian population. We allow concentrate on both genders male and female and our market will be in the whole Australia and not in a specific city.Australias population at the beginning of 2009 was 21,644,000 persons.The children aged population (0-14 years) was about 19.8% of the total population and the working age population was about 67.4% (15-64 years) of the total population. (OECD Fact book, 2008). However, in our market plan, we will exclude the 0-4 and 40-65 years population which means that we will try to overstretch from 50-60% of Australias population. Undoubtedly, some of the 40-65 years population would function our product. However, they will not be potential customers as the mentioned ones.2.4. S.W.O.T. Analysis-StrengthsMarket Leader in the industryGood quality image and high brand awarenessA high growth rate in the desired marketA huge product linesParent SupportAn international team working behind the plans achievementA very-well trained employees in all companys departmentA supply chain management to serve the whole countryWeaknessNew market forNestleUnstable economic conditions Decline in GDP growth rate and high inflation and unemployment rate.Customers are tightening their beltsExciting competitorsOpportunitiesA huge market sizeAn identified target marketNo large multinational size competitorsIncrease in sales and profitsIncrease in total Australias market shareIncrease in product lineAn opportunity to export the product to many countries around the worldThreatsSegments are shared by competitorsUncertain circumstances could affect our salesMisunderstanding of the productPoor advertising campaign due to the market conditionsAn unexpected drop in the confectionery and drinks markets.3-Product LaunchThe product launch is the most important part of this market plan.As we discussed in the previous chapter, we are going to launch a intoxication yoghurt product. So why did we choose this product specifically?If we take a quick view on Nestle share value in yoghurt and chilled diary industry we would realize the followingIn Chilled Diary category, Nestle value share was about 14.2% in 2008 comparing by 16.8% for the previous year.In Yoghurt category, Nestle value share was 11.8% in 2008 comparing by 15.8% for the year above.It is very easy to recognize that Nestle is facing a hassle in these above sectors for the last year. We all know that all companies now are facing financial problems and markets are unstable and nowadays many customers are tightening their belts. However, these two markets had an increase in their value rate for the last year with 3.5% value increase for Chilled Diaries and 5.9% increase for yoghurt products comparing by 2007. (Australias Grocery Magazine, 2009)Also, referring to the Australias Grocery Magazine, some of Nestls competitors such as Diary framers had achieved an increase in value shareAccording to the above, Nestle is facing a small problem in this market, so how to solve this problem? The answer is including many possibilities. We could reduce our prices, we could increase our market share by an increase in production, and we could modify our advertising and promotion activities. In addition, there is some other plan. We could enlarge our share in Chilled Diary category by launching a new product in a subcategory which is the Drinking Yoghurts. If we achieve this plan we could gain a higher market share, increase our sales and profits, enter a new market segment and finally we will gain new customers.The Drinking Yoghurt market is facing a good condition these days by an increasing 5.5% in value share in 2008 with a grocery value reached more than AU$50m , which means that this market is gaining new customers day by day and despite the unstable market situation, the drinking yoghurt market is in a developing trend.Nestle is already producing chilled diaries, yoghurts and fruit yoghurts so many product lines are ready for the launching of the new product. Also, Nestle is already gaining a high-ranking in the grocery market, therefore all shipping, transportation, supply chain, deliver products to supermarkets could be handled easily.Yoogo would be the brand name of our new product. We will launch the product at the beginning with three flavors Yoogo Mango, Yoogo Strawberry and Yoogo Apricot. After three years of market and sales observation, we will launch a new Light Yoogo, which will be Fat Free drinking yoghurt for people who care more about their health and lifestyle.Yoogos ingredients could contain the followingMilk, scan Milk, Fruit set mango or strawberry or apricot, and approved flavors and colors.Undoubtedly, Yoogo would face a high competition when it enters the market. ( We will discuss this later in the next two chapters). However , the main competitive brands would be yakult with 67.7% and Jalna with only 10.6% value shares in 2008. (Australias Grocery magazine, 2008). However, Nestle could produce the product and gain a high position among these brands. (We will discuss this later in the next two chapters).4-Market StrategyMarket Segmentation, Tar geting and PositioningTo gain a desirable position among all competitors in customers minds, we will segment our market on two bases-Demographic Segmentation Geographic SegmentationDemographic SegmentationWe are targeting customers depending on their ages. As we mentioned before, we will focus on children, youths and adults which are the majority of Australian population, we will exclude the 0-4 and 40-65 years population which means that we will try to attract from 50-60% of Australias population. This is a very huge segment as we are focusing on more than half of the countrys population.Furthermore, we believe that any of these segmented people, with any sex, income, occupation would manipulation our product as it is not a luxury product using by specific customers.Undoubtedly, we will vary our advertising campaign for each generation, i.e. the advertising campaign for children will be different than the youths one. Otherwise, we will make a small bottle for children (150 ml) and a large one for adults (300ml).Geographic SegmentationWe will divide Australia as geographically basis to zones and each distributor would be responsible for each zone. E.g. We will divide Australia to five zones Vic, NSW, WA, SA and QueenslandEach company when launching a new product desires a high profit margin, large sales volume, high growth rate. However, we will concentrate more in achieving a long-run high profit and sales instead of the short-run ones.We believe that there are some requirements for effective segmentationMeasurability, Accessibility, Substantiality and Actionability. (Kotler et al, 2007) Our team will work hard to meet all of these requirementsWe consider that we will face a huge competition and we will face also the threat of ersatz products. However, we will do our best to cover our market targeting by maximal three years and to be the market leader for this category in maximum five years. Our plan is to gain more than 55% of supermarket shelves in five years. We realize that this is a very hard mission, but we will try to achieve it by three main stepsUnderstanding our trade segments-Maintaining an advertising and promotion plans--Launching Yoogo with a reasonable price according to the company and according to our consumers.(we will discuss the price part later in Marketing Mix Strategy)Also, we will try to gain a competitive position in customers minds establish on the following two conceptsNestle Family BrandThe Nestle family brand is showing care and safety to consumers and this is a very good reason to attract the customer.CommunicationDue to Nestls brand name, it is very easy to be in touch.with our customers5-Marketing Mix strategyProductOur product is a Fruit drinking Yoghurt with three flavors Mango, Strawberry and Apricot. We will make two sizes, 150 and 300 ml. The gradients would be described as following Milk, Skim Milk, Fruit Preparation mango or strawberry or apricot, and approved flavors and colors(We had discusse d the product more briefly in chapter 3)PriceIn launching this product we could phthisis one of these two pricing methods Cost- based pricing Calculating the price by adding a mark-up to the cost of the product. (Kotler et al, 2007) Going-rate pricing Calculating the price basis on competitors prices, with less attention to our cost or to the market demand. (Kotler et al, 2007)Value-based pricing Calculating the price basis on buyers perception of value, with less attention to the sellers cost. (Kotler et al, 2007).In Nestle, we use the cost-based pricing methodUnit cost = variable cost + (unit fixed cost unit sales)Unit price= unit cost (1- desired cave in on sales)We determine our prices basis of the following objectivesProfitFor any company the most important issue is the profit earning, however, as we are launching a new product, we do believe that we will not gain a high profit margin at least for the first three yearsConsumer SatisfactionThe most essential factor when dete rmining the price is our customers satisfaction towards our products and prices.PlaceWe will divide Australia to 5 zones Victoria, NSW, SA, WA, and Queensland. However, we will try to promote Yoogo everywhere, in every small and large city in Australia. Customers will find Yoogo in hypermarkets such as Coles, Woolworths and Aldi, in medium size supermarkets such as IGA and even in small supermarkets such as Seven Eleven. Customers would find Yoogo in cafes, restaurants, hotels cinemas and beaches. In addition, Yoogo is a healthy fruity drink, so you can find it also at hospitals. This plan is a little bit hard to be achieved. However, with the well-established supply chain management in Nestle and with the very good relationships with suppliers, retailers and resellers, we could achieve this plan within maximum three years.PromotionPromotion is the activities that represent the value of the product and encourage customers to buy it. In our marketing campaign and promotion we will tr ay to reach every body every where. We will do advertising campaigns in newspapers, radio, streets and television.Seeing that the survey research is the most widely method for collecting primary data, before launching the product we will perform a marketing survey research we will go to clubs, streets and schools. Also, we will implement an online marketing research to collect primary data through online focus groups, using the integration of animation such as audio, picture and virtual environment would help us to overcome any limitations. We will try to select a sample of the population that has been selected, ask those questions about the product and the company and depending on the results of this research, we will implement our advertising campaign.We will support our promotion campaign basis on these four methodsA-Individual Selling In this campaign, we will implement a direct selling activity especially during the summer months of November, December, January and February. Ou r team will go to club and beaches to meet our target segments there, they will split t-shirts and caps with Nestle and Yoogos logos, and they will sell our Yoogos 150 ml bottle. By applying this innovative idea, we hope that our brand will get a great vision in terms of image, sales and brand awareness.B-Sales Promotion Besides personnel selling, we will implement some sales promotion plans. At the beginning of the product launching, we will go to streets and malls, we will offer free 150ml trial bottles to customers, we will encourage them to try our product and to give us their feedback by email or even by phone. In addition, we will offer a 150ml bottle free with the purchasing of three 300ml bottles. Adding to this trade promotion, we will give the retailer an addition rabbet 5% during our sales promotion. Our marketing team will implement a major healthy and education campaign about the importance of the product, our team will focus on the concept that our product is a healt hy one. Invitations would be sent to parents of school children to attend these seminars. This could help us to improve our brands image in consumers minds.C-Public Relations Public relation is one of the most important factors in all multinational companies promotions. Every year, Nestle is launching its annual report containing information for shareholders and stockholders. In addition, a large amount of information regarding our product and our promotion would be found in newsletters and magazines issued by Nestle Australia.This promotion would obviously conduct a hand in formation of the awareness of our brand.