MARKET SEGMENTATION Meaning In today’s competitive business world, it is not possible to sell everything everyone. There are different types of customers, each with different needs and wants, tastes and preferences, different purchasing power and so on. For instance, the Mumbai markets do have various types of customers such as college student, office goers, retired people, higher income people, middle income people, lower income people, Maharashtrians, Gujarathis, Goans, etc. Again in each category of customers representing the most desirable market and accordingly make every possible effort to induce and encourage them to buy the goods or services. Thus, market segmentation enables a firm to frame different marketing mixes for different groups of customers. Normally, the market is made up of people with: • Different characteristics, • Different needs and wants, • Different purchasing power, • Differences in the degree of willingness to buy. • Differences in eligibility to buy. If marketers wish to do an effective marketing job in such diverse and heterogeneous markets, they must identify the differences in the different group of people in the market. This is because one marketing mix will not satisfy them. In other words, different marketing mixes have to be designed to satisfy different marketing groups. Thus, there is a need for market segmentation.
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REQUIREMENTS OF EFFECTIVE MARKET SEGMENTATION 1. Heterogeneity:
The various groups of the consumers for the type of product which the firm is selling in the market must be different. In other words, potential customers’ characteristics and wants must be heterogeneous i.e., different from each other. 2. Availability of data:
The information on the consumer variables must be easily available. The marketing manager must not find it difficult to collect the data. Consumers, dealers and other must be willing to provide correct data. Otherwise, marketing segmentation process may be of no use. 3. Measurability:
The segment variables must be capable of measuring. It refers to the measurement of the size of the target market and also the purchasing power of the segment market. The other segment variables such as the age factors, use rate, etc. must be capable of measuring. In other words, the segments can be identified and compared in terms of relative attractiveness. 4. Sustainability:
It refers to the degree to which the segments are large and/or profitable. The market segment must be sufficient in size so as to design a suitable mix to the satisfaction of target segment and at the same to enable the firm to earn sufficient profits. There is no sense in concentrating marketing efforts if the size of the market segment does not bring returns in form of profits. There must be at least one segment large enough to serve profitably. 5. Approachability:
It refers to the degree to which the segments can be effectively reached and served. The segment market must be located at a particular place and is exposed
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to certain advertising media, and then only it can be effectively reached and served.
6. Action ability:
It refers to the degree to which effective marketing programmes can be formulated for attracting and serving the customers. There is no sense in identifying several market segments, if the firms are not in a position to undertake marketing programmes to serve and satisfy the consumers. 7. Responsiveness:
It refers to the degree to which the market segment responds to the marketing programmes adopted by the firm. For instance, the marketing firm may develop high quality products for quality products for quality conscious people. They should react favourably towards such products. In other words, there should be a favourable response from the segment market.
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BASES OF MARKET SEGMENTATION There are several ways or methods to segment a market. Such ways or a method depends upon consumer characteristics and their responses to the products or services. A paradigm shift has taken place in the way the Indian corporate (is) viewing customers. There has been a shift from organizing by-products to organizing bymarket segments. For example, Maruti is segmenting is customers on the basis of economic and premium class, which was not done previously. I.
GEOGRAPHIC SEGMENTATION :
In geographic segmentation, the market is sub divided on the basis of area. Region: Regional segmentation is made because regional differences exist in respect of demand for products. For example, buyers from south India are different from the buyers in north. Urban / Rural: There are differences in buying behavior of urban and rural customers. Accordingly, marketing strategies must be designed depending upon their likes, dislikes, moods, preferences, and fashions and buying habits. Locality: Consumer’s buying behavior is also reflected by the locality within a particular city. For instance, there are differences in terms of buying patterns of people residing at Parel and Parle, within a city like Mumbai. II.
DEMOGRAPHIC SEGMENTATION:
Demography refers to study4about the different aspects of population. Markets can be divided on demographic factors like age, gender, education etc. The various demographic factors are:
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Age: The primary method of analyzing markets by age is to divide the total population into age groups and analyze the wants and needs of each group. Gender: Marketers devote much attention to male and female differences in purchasing. Today, marketers segment female groups into college girls, working women, housewives, etc. Again, male groups can be further classified. Income: Buying patterns depends on income of the consumers. No two individuals or families spend money in exactly the same way. If a researcher knows a person’s income, he can predict with some accuracy wants and needs of that person and how those wants are likely to be satisfied. Education: Market can be segmented on the basis of education – matriculation or less, under graduates, graduates, post-graduation, etc. Most studies show that the highly educated people spend more than the poorly educated in respect of housing, clothing, recreation, etc. Family Size: The consumption patterns of certain products definitely vary with the number of people in the household. Manufacturers of certain products such as icecream market family packs. Family Life Cycle: The market can be segmented as bachelors, newly married couples, married with grown up children, older married couples, etc. For selling tours and vacations, Life Insurance policies etc., this segmentation is of use. Race and Religion: Consumption patterns of certain products differ on the basis of religion and race, such as alcohol and meat products.
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SOCIOGRAPHIC SEGMENTATION:
The market can be segmented on the basis of sociological factors such as : Cultural Influences: The marketer must consider cultural influences while segmenting markets. People in urban areas are influenced to a certain extent by western culture, whereas, many people in villages follow more or less traditional culture. Culture is influenced by our socio-cultural institutions like family, religion, language, education, and so on. Influence of Social Class: Buying behaviour is reflected by the influence of social class to which the consumers belong. The social class can be segmented as – lower -lower, middle-lower, upper-lower, lower-middle, middle-middle, upper-middle, and lower-upper, middle-upper and upper-upper. Firms dealing in clothing, home furnishing, automobiles, etc. can design products for specific social class. Influence of Reference Groups: A reference group may be defined as a group of people who influence a person’s attitudes, values and behaviour. Consumer behaviour is influenced by the small groups to which they belong or aspire to belong. These groups include family, religious groups, a circle of close friends or neighbours, etc. Each group develops its own set of attitudes and beliefs that serve as guidelines for members’ behaviour. III.
PSYCHOGRAPHIC SEGMENTATION:
It refers to individual aspects like life style and personality. Life-Style: Sellers study the life-styles of the consumers. For example, a manufacturer of readymade garments may design his clothes differently matching different life styles of college-students (more fashionable), office-goers (more sober) and so on. Personality: Personality characteristics such as leadership, independence, masculine, impulsive, ambitious,-etc., do influence buying behaviour.
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IV.
BEHAVIOURAL SEGMENTATION:
In this case, buyers are divided into groups on the basis of their response to the product – usage rate, user status, loyalty status, buying motives, and so On. Usage Rate: One possible way to define target market is by product usage. There can be heavy users, medium users, light users, and nonusers. Targeting on this basis may be useful to the sellers who want to increase consumption by present users and to convince and induce nonusers to become users. User Status: Market can be segmented on the basis of user status such as: nonuser, ex-user, potential user, first-time user, regular-user, & so on. Readiness Stage: Market can be segmented on the basis of people’s readiness to buy the product. Some people are well informed and are interested to buy the product. Some other may be well informed but not interested to buy the product. Buying Motives: Buyers buy the product with different buying motives such as economy, convenience, prestige, etc. Accordingly promotional appeals can be directed to the target audience. SEGMENTING BUSINESS MARKETS Business markets can be segmented on the basis of geographic location, type of organization, customer size, product use, demographic factors, and usage rate benefits sought. Geographic location: The demand for business products varies considerably from one geographical area to another as a result of differences in climate. Terrain, natural resources or similar factors. It is basically used for serving industries that are concentrated in certain location. Type of organization: 7
Another basis for segmenting organization market is the type of organization in that market. Different types of organization often require different product features, distribution system and price structures. Hence due to these variations in needs, a marketer may decide to concentrate on a single segment with one marketing mix or may focus on several segments with multiple mixes. Size of customer The market may be segmented on the basis of size of the customer to be served. Accordingly marketers employ different marketing practices to reach various customer groups. Product use: Depending upon product use the markets can be segmented as products use for production, research or other business operations. Usage rate: Segmenting business market on the basis of usage rate includes-heavy users, light users or non-users. Other factors include: • Segmentation on the basis of purchasing criteria (quality, service, price) • Segmentation on the basis of purchasing function (decentralized and centralized) • Segmentation on the basis of loyalty.
STEPS IN THE MARKET SEGMENTATION
The following are the steps or procedures in developing a segmentation strategy:
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1. Define the relevant market: Before making an attempt to define market segments, a company should define its relevant market. For example, a company that produces a soft drink is in the soft drink market, and a company that is selling sports cars is in the sports car market. A proper definition of relevant market will keep the company on the right track. 2. Analyze characteristics and wants of potential customers: After defining its relevant market, the company should collect data that describe the characteristics and wants of the potential customers. This data can be collected from secondary research (collecting and using data that is already available in published form). The data can also be collected from primary sources by conducting a field survey. 3. Identifying bases for segmentation: The company can proceed to identify bases for segmenting the market. The bases include geographic, demographic, sociographic, psychographic and behavioural. The company may identify all bases or one or two bases. Specific segmentation variables, based on the data collected might include age, sex, occupation, lifestyle, brand loyalty, etc. 4. Define and describe market segments: After identifying possible segmentation variables, the company can proceed to define the various market segments. This can be done by developing market segment profiles which describe the characteristics and wants of the people in each market segment. The people in one segment will be highly similar to each other in terms of their characteristics and wants. However, they will be different from the people in other segments in terms of their characteristics and wants. Thus, a company in the soft drink market can define market segments as- fitness conscious, fun loving college students, occasional sippers, sociable, and the like. 5. Analyze competitors’ positions: 9
After defining and describing the market segments, the company proceeds to identify the major competitors in each of the segments. One approach is to survey a sample of consumers in each of the segment and determine as to how they rate various brands in terms of features, price, taste, etc. and find out the reasons as to why they prefer a particular brand over others. 6. Evaluate market segments: The company must conduct cost benefit analysis of serving a particular market segment. Serving a market segment profitably requires that the cost of the marketing effort be less than the sales revenues realized from serving it. Evaluating the market segments in terms of the generation of sales revenue and the cost of marketing efforts helping ranking the segments in terms of relative attractiveness. 7. Select market segments: After identifying the various market segments and evaluating their relative attractiveness, the company must select the market segment that it intends to serve. While selecting the market segment, the company must consider: • Overall company’s objective. • Resources and capabilities of the firm. • The level of competition. • The strengths and weaknesses of competitors. • The expected competitors’ reaction to the firm’s entry into one or more segments. 8. Finalizing the marketing mix: After selecting market segment, the company must then finalize the marketing mix appropriate for specific market segment. In other words, the company has to make decisions in respect of the product, price, promotion and distribution efforts. It is to
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be noted that each segment needs a separate marketing mix, because consumers in each segment are different from those of other segments.
ADVANTAGES OF MARKET SEGMENTATION
1. Determination market opportunities: Market segmentation enables to identify market opportunities. The marketers can study the needs of each segment in the light of current offerings by the
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competitors. From such study, the marketer can find out the current satisfaction of customers. Segments with low level of satisfaction from present offering may represent excellent market opportunities. For instance, customers may not be satisfied with the current offering of water purifiers in terms of product or after-sale service. Such situation will enable a marketer to launch a new range of water purifiers and market them well. 2. Adjustments in marketing appeals: Sellers can make best possible adjustments of their product and marketing appeals. Instead of one marketing program aimed to draw in all potential buyers, sellers can create separate marketing programs designed to satisfy the needs of different customers. Proper advertising and sales promotional appeals can be made depending upon the target audience. 3. Developing marketing programs: Companies can develop marketing programmes and budget based on a clearer idea of the response characteristics of specific market segments. They can budget funds to different segments depending upon their buying response. 4. Designing product Market segmentation helps in designing product that really match the demands of the target audience. Products with high market potential can be designed and directed to meet the satisfaction of the target market.
5. Timing of marketing efforts: It helps in setting the timing of the promotional efforts so that more emphasis is placed during those periods when response is likely to be at its peak. For instance, consumer goods can be heavily advertised to Christians during Christmas season and to Hindus during Diwali time. 6. Efficient use of resources: 12
By tailoring marketing program to individual market segments, management can do a better marketing job and make more efficient use of marketing resources. For example, a small firm can effectively use its limited resources – money, sales force, etc. – in one or two segmented markets rather than unsuccessfully, aiming at a wider market. 7. Better service to customers: Market segmentation enables the company to concentrate its marketing effort in a particular market area, thereby, providing a better service to the target customers. Proper marketing segmentation cans facilitate customer satisfaction. 8. Helps to fix prices: The marketing segmentation also enables to fix prices of the goods and services. Since different market segments have different price perceptions, it is necessary to adopt different pricing strategies for different markets. For instance, the prices for lower income groups will have to be lower and accordingly the product and promotional efforts are adjusted. 9. Assist in distribution strategies: If you have a specific market segment you’re trying to reach, you can decrease your distribution channels, targeting those outlets that have the highest amount of traffic from your desired customers. Once you learn where your main target customer shops, you can focus your sales and promotions budgets in those outlets.
10.Media selection: It helps in selection of advertising media more intelligently and in allocation funds to various media. The funds are allocated to various media depending upon the target audience, impact of the media, competitors advertising etc.
LIMITATION IN MARKET SEGMENTATION 13
1. Conservative attitude of management: In India, there are companies that adopt a conservative attitude towards marketing. They do not give much importance to marketing activities. They fail to realize the benefits of market segmentation. For such conservative managements, it does not make meaning to segment the market and adopt different marketing mixes. 2. Deceptive variables: There are certain consumer elements that are deceptive. For instance, the income of the consumers. It is often felt that the luxury items such as cars, sophisticated watches, etc., are purchased only by the rich class. However, now-a-days, a large number of customers belonging to the middle class do purchase such items. Therefore, it is difficult to strike a line between the rich and the near rich. 3. Unpredictable consumer behavior: It is quite difficult to judge precisely the behavior of the customers. They may have different perceptions about product, its features, price, etc. such perceptions do change at different times. Today, the customer may be price conscious; tomorrow he may be quality conscious, then he may again be price conscious. Thus, it is very difficult to judge consumer behavior.
4. Inadequate market information: The marketing manager may not be able to get the exact market information to base his decisions on market segmentation. This may be due to wrong information supplied by the consumers in respect of their income, and other aspects or the market data collectors may be ineffective to collect the right data. As such the decisions on market segmentation may be based on inadequate, incorrect, and outdated information.
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5. Wrong judgment: Marketing people may wrongly interpret the marketing data. To a great the quality of market segmentation depends upon the quality of marketing people their imagination, intelligence, maturity and experience. 6. Changing environment: The changing market environment may also throw the process of market segmentation out of gear. Imported goods may flood the market as a result of market liberalization policies. In such instance, the market segments may not respond to the marketing mixes designed by the Indian firms. 7. Diversity of Indian market: The diversity of Indian markets like rural-urban, rich-poor, etc., poses a problem to have a systematic segmentation of market. Again, excessive market segmentation amount to market fragmentation and this may not be profitable to the company. 8. Time consuming and expensive process: Segmenting markets involves lot of time, effort, and money on the part of the firm. At time, there may a waste of time, effort and money, especially when the market situation changes considerably before implementation of the market segment strategy.
POSITIONING The term “positioning” was made popular in 1972 by two marketing expert. Al Ries and Jack Trout. They contended that marketing is more a battle of perceptions than of products. Positioning is the most fundamental concept or tools in marketing. The product or brand must register in the buyer’s mind. How strongly it does so, would decide its position in the market place.
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Positioning starts with a product. A piece of merchandise, a service, a company, an institution or even a person. But positioning is not what you do to a product. Positioning is what you do to the mind of the respect. That is, you position the product in the mind of the prospect.
STEPS IN PRODUCT POSITIONING 1. Identifies competitive differences: The marketer should identify the competitive differences of his product or service. The differences can be: a) Product differences such as features, design, packaging, etc. b) Service differences such as delivery, after-sale-service, etc. c) Personnel (sales people, service technicians, etc.) differences such as competence, nature/manners, etc. d) Image differences such as the goodwill of the producers, brand name, brand price, brand advertising, etc. 2. Selecting important differences: The marketer must select the most important differences that would differentiate it from that of the competitor. For example, if marketers of TV sets claim that they provide 3 years guarantee and if a particular marketer provides 7 years guarantee, then this could be an important difference which the firm offers. 3. Developing positioning strategy: The marketer should then make effort to develop positioning strategy. The marketer may position the brand by following any of the following positioning strategy: a) Using specific product feature
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b) Positioning by Price c) Positioning by use d) Positioning by competitors, etc. 4. Communicating the company’s positioning: The marketer should select proper media to communicate the company’s positioning. The right media must be selected to communicate the image of the brand. For example, an expensive watch like Rolex communicates its image by associating with the Wimbledon Tennis Tournament Rolex Watches may not be able to communicate the rich image of the rich image of the brand if it sponsors sport like cricket which is played by few countries and that too liked by masses. 5. Follow up positioning: The marketer may try to follow up the positioning of the brand. This can be done by undertaking research, or by analyzing the sales of the brand. If the positioning strategy is not successful, the marketer may re-position the brand with alternative strategies, so as to create a distinct image in the minds of target customers.
POSITIONING STRATEGIES The adviser can adopt different positioning strategies in order to develop or reinforce a particular image for the brand in the mind of the audience. The various positioning strategies are: 1. Using specific product features: The most popular positioning strategy is to highlight specific product features that would benefit the customer. At times, a new product can be positioned with respect to product features that competitors have ignored. It would be advisable to 17
highlight a specific but important feature rather than positioning along several features. 2. Positioning by price and quality: In many product categories, the price quality feature is so important that it needs to be considered in any positioning decision. The adviser may position the product as quality product that is worth the money. Other may position the product as quality product but still at a reasonable/affordable price. 3. Positioning by use: The brand can be positioned by associating it with a use or application. The adviser may extend the use of the brand 4. Positioning by user category: The brand may be associated with a user or a class of users. The advertiser makes use of famous personalities or models to influence the audience. 5. Positioning by product class: Some advertisers highlight the product class association. The toilet soap Dove positioned itself apart from the soap category as a cleansing cream product for women with dry skin.
6. Positioning by cultural symbols: Some advertisers may use cultural symbols to differentiate their brands from competitors. 7. Positioning by competitors: In some cases, a reference may be made directly or indirectly to one or more competitors. Perhaps the most famous positioning strategy of this type was that from Avis.
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8. Positioning by product’s benefits: The advertiser can position the product on the basis of special benefit of the product. For example: “fast to cook, good to eat” of Maggie Noodles. 9. Positioning by corporate image of identity: The most common base for positioning is corporate image or identify. Scores of products or brands use their corporate names to position themselves. Product ranging from health care and cosmetics to consumer durables and computers use this type of positioning.
CASE STUDY
NESTLE INTRODUCTION Nestlé's products include baby food, bottled water, breakfast cereals, coffee, confectionery, dairy products, ice cream, pet foods, and snacks. 29 of Nestlé's brands have annual sales of over 1 billion Swiss francs (about $1.1 billion),including Nespresso, Nescafé, Kit Kat, Smarties, Nesquik, Stouffer's, 19
Vittel, and Maggi. Nestlé has around 450 factories, operates in 86 countries, and employs around 328,000 people. It is one of the main shareholders of L'Oréal, the world's largest cosmetics company. On 4th September 2013, software and searchengine giant Google announced that they would be naming the next Android, version 4.4, after the ever-popular chocolate wafer "Kit Kat" with Nestlé’s legal permission. Nestle, confirming the team-up, announced the distribution of around 50 million Kit kats worldwide, featuring the android mascot in the covers. Nestlé was formed in 1905 by the merger of the Anglo-Swiss Milk Company, established in 1866 by brothers George Page and Charles Page, and Farine Lactée Henri Nestlé, founded in 1866 by Henri Nestlé. The company grew significantly during the First World War and again following the Second World War, expanding its offerings beyond its early condensed milk and infant formula products. The company has made a number of corporate acquisitions, including Crosse & Blackwell in 1950, Findus in 1963, Libby's in 1971, Rowntree Mackintosh in 1988, and Gerber in 2007. Nestlé has a primary listing on the SIX Swiss Exchange and is a constituent of the Swiss Market Index. It has a secondary listing on Euronext. In 2011, Nestlé was listed No. 1 in the Fortune Global 500 as the world's most profitable corporation. With a market capitalization of $233 billion, Nestlé ranked No. 9 in the FT Global 500 2013.
Mission Statement Nestlé is... ...the world's leading nutrition, health and Wellness Company. Our mission of "Good Food, Good Life" is to provide consumers with the best tasting, most nutritious choices in a wide range of food and beverage categories and eating occasions, from morning to night.
Vision and values
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To be a leading, competitive, Nutrition, Health and Wellness Company delivering improved shareholder value by being a preferred corporate citizen preferred employer preferred supplier selling preferred products.
Nestlé’s Presence in India After more than a century-old association with the country, today, Nestlé India has presence across India with 8 manufacturing facilities and 4 branch offices. Nestlé India set up its first manufacturing facility at Moga (Punjab) in 1961 followed by its manufacturing facilities at Choladi (Tamil Nadu), in 1967; Nanjangud (Karnataka), in 1989; Samalkha (Haryana), in 1993; Ponda and Bicholim (Goa), in 1995 and 1997, respectively; and Pantnagar (Uttarakhand), in 2006. In 2012, Nestle India set up its 8th manufacturing facility at Tahliwal (Himachal Pradesh). 21
The 4 Branch Offices located at Delhi, Mumbai, Chennai and Kolkata help facilitate the sales and marketing activities. The Nestlé India’s Head Office is located in Gurgaon, Haryana. Map of India
* This pictorial representation does not purport to be the political map of India.
NESTLE PRODUCTS
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Bases for Segmentation: Consumer markets can be segmented on the basis of following customer characteristics. 1. Geographic 2. Demographic 3. Psychographic 4. Behavioral
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Geographic: Weather: Nestlé Bangladesh Limited segmented its market for Nescafe Ice based on the geographic weather: hot and cold. Nescafe Ice: A coffee which can be consume with ice. During hot season consumers consume this coffee with normal or cold water with ice cube to bring freshness in their mind.
Demographic: Age: Nestlé segmented market for its major products based on the age. For the products Cerelac, Lectogen, Koko Krunch, Nido, Nestle divided the market segment for baby and children of different ages. Nido: It is nutritious milk specially formulated for children 2 years onwards. It contains 25 minerals and vitamin D which helps child’s growth. Cerelac: Nestle also offers cerelac for new born baby. It contains milk and rice mixed for under one year’s baby. It fulfills baby’s proper nutrition. Nesquick, Koko Krunch: Both are chocolate milk for children.Nesquick and Koko krunch maintain child’s proper growth. It’s very delicious and also contains vitamin protein, mineral. Lactogen: Nestle brings full cream milk powder in our country. It gives baby proper nutrition. Lactogen 1 is for babies whose age less than 7 months and lectogen 3 is for babies whose age is below 12 months. Income: Nestle segmented their market based on customer’s income in an effective way.
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Lectogen: Nestle charge tk 800 for per 900gm Lectogen 12 milk powder. They also charge tk 1000 for 900gm Lectogen 3 milk powder pack. Middle income and low income people are not able to buy these products for their babies. Occupation: Nestle segmented the market based on their customer’s occupation. Nescafe classic: This product is for those who work hard and needs more freshness. Both the male and female who need more caffeine Nescafe classic is for them.
Psychographic: Life style and personality: Nestle provides KIT KAT these people who really want to enjoy chocolate. Nescafe 3 in 1 is for exclusively those customers who are really busy and do not have enough time. They can save their time by taking Nescafe 3 in 1.All the things sugar, milk and coffee remain mixed.
Behavioral: Benefits: Based on benefits Nestle segmented their market in an effective way. So they provide Cerelac for those customers who want more benefits from the products. Cerelac contain a high nutrition for baby’s whose age below 1 year. Two most important elements rice and milk remain mixed in cerelac. On the other hand, cerelac contains vitamin, mineral and all nutritious elements for babies.
Target Marketing: Market segmentation reveals the firm’s market opportunities. Then the firm sort market targeting by evaluating the various market segments and deciding which and how many segments it will target. Nestle Ltd evaluated the various market segments on the basis of segment size and growth, segments, structural attractiveness, and company objectives and resources and decided to launch their operation all over the country. Nestle separate their target market because of having unique need and wants. Nestle Ltd selected their target market into two market coverage strategies: 25
Undifferentiated: Nestlé has offered several products such as Nescafe 3 in 1 Maggi noodles, and Kit Kat to the people of the whole Bangladesh without differentiating the market segment. Differentiated: Nestle also selects the differentiated marketing. It offers different product for different segments based on different age, occupation, season and climate. Nescafe 3 in 1: Coffee for people who are busy. Koko Krunch, Nesquick: Chocolate milk who want to get taste of chocolate. Nescafe Ice: Cold coffee for the people in hot weather. Concentrated: Through concentrated marketing, Nestlé achieves a strong market position because of its greater knowledge of consumer needs. In the niches it serves and special reputation it acquires. Nestlé specializes in producing baby foods. It offers nutritious milk powder Lectogen 1 for babies whose age is less than 7 months and lectogen 3 for babies whose is under 12 month. It also offers baby nutrition cerelac for baby less than 1 year.
Positioning Strategy: By creating product, service, channel, people and image differentiation Nestle reach the consumer touch point more effectively & efficiently in comparing with their competitors in the highly competitive food processing sector. Product Differentiation: Nestle brings a lot of product for target customers. They provide 25 types of minerals in Nido for children. It also provides Cerelac and Lactogen1 &3 for newly born baby exclusively. Now the doctors prescribe these products for babies to their parents for high nutrition Nescafe is a product which contains 4 types of categories. They offer Nescafe ice for hot weather, classic for all 3 in 1 for those who are busy. They provide Maggi including Maggi instant; 26
Maggi 2 minutes which contain various minerals, vitamins and nutritions. Maggi also provide magi healthy soup and Maggi corn soup but charge the same price. Channel Differentiation: Nestle reach their products to the customers through their expert market salesman and transportation. So that their products are much available to their respective customers. Image differentiation: Nestlé’s logo is totally different from its competitors that are greatly accepted by its customers. For that reason customer easily identify them in the market which is another effective advantage for Nestle. People differentiation: Nestle has a large number of employees that are highly educated and trained. In Bangladesh, 400 employees are working in market Company chairman; Peter Brakeck- Letmathe and CEO Paul Bulcke are highly educated, wise and experienced people. They are running this business successfully for a long time. Service differentiation: another advantage for this company is better service for its respective customers from its competitors. They provide 24 hours hot line service. High quality checking is maintaining for its customers. Its marketing dept. and PR (public relation) dept. are working for finding out customer’s new demands and response toward their products. Selecting an overall positioning strategy: The full positioning of a brand is called the brands value proposition-The full mix of benefits up [on which the brand is differentiated and positioned. More for more: More for more positioning involves providing the most upscale product or service and charging a higher price to cover the higher cost. Exactly Nestle is doing that. Nestlé’s products provide more benefit and for that Nestle charge higher price than other competitors. Nido ensure nutrition and charge 250 tk for 400 gm. But Fresh, Marks do not ensure nutrition and charge less than that of Nido. Respectively Nescafe, Maggi noodles ensure quality for high price, rather than competitors.
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Positioning Statement Baby Products: To babies who are deprived of proper nutrition, Nido, Cerelac, Lactogen are the nutritious milk Product that give you more nutrition than any other brand because these contain different types of vitamin, mineral etc. Nescafe: To busy people who drink coffee and have little time for taking rest, Nescafe is the coffee that gives you more energy than any other brand because it has the highest level of caffeine, Maggi: To people, noodles and soup consumer who seek better quality, Maggi noodles and healthy soup that gives you proper nutrition than any other brand because it has the best quality.
Their motto for business is “GOOD FOOD GOOD LIFE”
CONCLUSION Nestle has seen a strong start to 2008, partly thanks to its strategy of increasing product prices quickly in line with commodity price increases. Through internal research and development at Nestlé there have also been significant advances in the environmental impact of refrigerants and packaging. Without compromising product quality there was a reduction of 392 000 tonnes of packaging material between 1991 and 2008. Evidence shows that Nestlé advertised and still advertises its formula as a risk-free substitute (or even a preferable alternative) to its products, resulting in increased use.
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BIBLIOGRAPHY
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