Analysis of the marketing strategy of Nestle Company in Uzbekistan market

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Introduction (brand overview)

This coursework is devoted to the analysis of the marketing strategy of Nestle Company in Uzbekistan market.

Nestle is the world's leading health, nutrition and wellness company. Nestle's mission, named "Good Food, Good Life" is to provide consumers with the most nutritious tasting choices in a wide range of food and beverage categories from morning to night such as coffee, cocoa, milk and milk products, mineral and drinking water, juices, soups and extracts.(nestle.com, 2014)

My work, based on the whole nomenclature of the goods of Nestle, will be focused on marketing strategy of bottled water “Pure Life”.

Market Segmentation

Segmentation is the process of defining and dividing a large homogenous market into obviously identifiable segments having analogous needs, wants, or demand characteristics. Its aim is to design a marketing mix that precisely corresponds to the expectations of consumers in the targeted segment. (businessdictionary.com, 2014)

The four basic market segmentation-strategies are based on:

Demographic,

Geographic,

Socio-cultural, and

Psychographic differences.

The literature suggests the fifth type of market segmentation is behavioral segment.(slideshare.net, 2014).Moreover, the most appropriate and suitable differentiation criteria will be selected for our product specifically.

Geographic differences:

Climate (regions with hot climate or cold climate)

Obviously, mineral and drinking water of company Nestle has a greater demand in countries with hot climate. However, there is a decent demand in countries with cold climate.

Countries and regions (Uzbekistan and other countries)

Company Nestle operates in different counties and regions. Each country has its own features and traditions of consuming bottled water. However, the objective of the coursework is to examine the work of company in Uzbekistan market, in other words, it will be chosen the segment - consumers in Uzbekistan.

Geographical status of the region (capital, city, village etc.)

For such product, as a mineral and drinking water geographic status of the region is not essential, but it can be assumed that in the cities consumption of bottled water is more than in the countryside.

Demographic differences:

Demographic features are most popular for segmenting the market. However, for such product as mineral and drinking water demographic differences are not significant; because market division by sex, age, stage of the family life cycle, education, occupation, income level is not principled. People drink mineral and drinking water, in spite of all these factors.

Socio-cultural differences:

Culture

Here, the market can be divided into different segments based on the culture of consumption of bottled mineral and drinking water. Currently in Uzbekistan use of bottled drinking water is becoming increasingly popular.

Religion, nationality, social class

Religion, nationality and social class do not have an important impact on the utilization of mineral and drinking water. These signs of market segmentation can be neglected.

Psychographic differences:

Lifestyle (healthy, bohemian, active, business, sport)

It may be noted that out of all types of lifestyle the greatest demand for water consumers leads to healthy, active and sport lifestyle.

Personality type (Resigned, Struggler, Mainstreamer, Aspirer, Succeeder, Explorer and Reformer)

Conducting segmentation of consumers of mineral water on this basis is inexpedient.

Behavioral differences:

Reason for making a purchase

Everyday purchase

Special case (on a trip, for event)

Difference in these segments is the size of the container. In other words, when buying for ordinary everyday use to home - it can be large capacity bottles(5, 10, 18.9 liters), however for the trip or holiday feasts people use bottles with small capacity(0.5, 1, 1.5 liters).

Desired benefits

Quality

Service

Price

For this product the consumer selected the water in terms of its quality and reasonable prices.

Target market

On the basis of the foregoing for segmentation of such goods as bottled mineral and drinking water Nestle - it can be concluded the following:

Market of this product does not require division for a large number of features of segmentation. This product applies to goods of mass demand and should not make differences between various segments.

Main features of segmentation are the region, the status of the region, the climate, the reason for the purchase.

After the segmentation profiles of obtained segments are made, it is necessary to make and select the target market. The consumers a company wants to sell its own products and services to, and to whom it directs its marketing efforts. Identifying the target market is a crucial step in the development of a marketing plan. A target market can be separated from market as a whole by geography, buying power and demographics, as well as by psychographics. (investopedia.com, 2014)

That is, on the basis of the foregoing, the target audience of bottled mineral and drinking water Nestle Uzbekistan are consumers of all ages, regardless of sex, education, nationality, religion, etc.

Positioning

Positioning defines where the product stands in relation to others offering similar products and services in the marketplace as well as the mind of the consumer. (economictimes.indiatimes.com, 2014)

Consumers choose a product based on its properties, the most important for them. In order to position the product, the number of actions must be carried out:

Construct map positioning, where to place the product

Construct map of consumer preferences

Compare these two maps

It is obvious that company Nestle has found its niche on the Uzbek market of mineral bottled water. Distinctive features of this product are the best value of quality and price of the product, a variety of containers spill, and most importantly - the popularity and reliability of the brand Nestle. Of course, Nestle has competitors such as Montella, Hydrolife, BonAqua.

4Ps analysis:

Product

The company "Nestle" has been operating for 11 years on the market in Uzbekistan. For a global company "Nestle" the most ambitious project is production of bottled water "Pure Life ®".

This water, known under the brand Nestle Pure Life, today is the main product of Joint Venture "Nestle Uzbekistan." Here, water is available in six formats - 0.5 liter, 1 liter and 1.5 liter with gas and without.

Plant in Tashkent, which runs from January 2011, bottled water produces three sizes - 1.5 liter carbonated and non-carbonated in 5 liters and 5 gallons (about 18.9 liters).

The product is artesian water, which runs multi-stage purification. Moreover, quality standards that are enforced by the Joint Venture in Uzbekistan is a sole standard for all 30 countries where the production of such water approved by the central laboratory of “Nestle” company.

Furthermore, specimen from each batch of the finished drinking water is stored in the Tashkent factory for the full period of storage and continues to investigate the requirements for compliance with standards. Also, immediately after the release of the next batch, in addition to different kinds of analysis, water samples are tested and tasted. This helps to determine whether impact is not related elements - PET bottles, caps and so on to the standard taste of water. The total amount of various tests is up to 100.

Perhaps improved design form of packaging products will give a higher consumer satisfaction, but the introduction of fresh products in the Uzbek market would cause higher satisfaction for people of Uzbekistan.

Price

A complex stage in opening the business is pricing goods. Different companies use various pricing strategies. Nestle Company applies cost based pricing.

“Cost-based pricing - a pricing method in which a fixed sum or a percentage of the total cost is added (income or profit) to the cost of the product to arrive at its selling price.” (businessdictionary.com, 2014)

Nestle ads fixed percentage to the cost of making or buying the product. It differs from other strategies by easy calculation. If the mark-up percentage is applied consecutively across product ranges, then the business can also predict more reliable what the total profit margin will be. (tutor2u.net, 2014)

The price is determined by the following factors:

Сosts (cost of the product) on the production of goods - determine the lower limit prices.

Demand - determines the upper limit prices

The price level of competitors' products - determines the price range of your product.

Besides, discriminatory prices, various discounts are taken into account.

Nestlй uses the "cost + profit rate", and uses a pricing strategy based on the prices of competitors' products. But when buying bottled water Nestle consumers choose water based on its production quality and reliability of the brand.

In retail sales there is also discriminatory pricing strategy. In cafes, restaurants, and other places the price of bottled water Nestle is usually overstated, based on the situation.

Also, seasonal sales can affect the price of the product. During the summer the price of water Nestle is overstated, however in winter seasonal discounts are introduced.

Promotion

Advertisement is a tool to introduce the product on the market. (Kotler, 2012) The “Nestle” Company uses different media as television, radio, targeted advertising, promotions and all types of pranks.

Increase its share of the adult segment (with children) Nestle traditional methods are hard. At a child's audience has large benefits: children are impulsive when shopping and relatively simple to part with money. At the same time, children - a loyal, attentive audience of advertising, for which it is a method of understanding the world. True, children's brands need constant advertising support; therefore they always cost more than the adults. The audience is completely replaced every three years, children grow up, furthermore, interest in the product is lost if a child, for instance, sees the same cartoon on the package or the similar commercial.

In addition nowadays, the most widespread promotion tool is Internet, because almost everyone has own account in the World Wide Web. Even small advertisement laterally in the web site will have worthy attention.

Place

Nestle Pure Life is making full efforts to supply the product to ultimate consumers. For this aim the company uses the conventional marketing channels of distribution. This product firstly goes to the wholesaler then goes to the retailer and then to consumer. The Nestle company also uses the vertical marketing system in which retailers also take supply from company directly resources without contact with while sellers. According to this strategy the margin of company decreases and going into the interest of the final consumer (Slideshare.net, 2014). According to statistics, 30% of bottled mineral and drinking water in Uzbekistan is owned by Nestle. (gazeta.uz, 2014) This is a good coverage of the market, with competitors such as Hydrolife, BonAqua and Montella.

It is best to implement the product in small stores throughout the city, because people just go from home to the nearest shop and buy water or other products Nestle.

SWOT analysis

This analysis allowed us to identify the range of strategic options for further development of the company.

Brand, a positive image to customers and a wide range of goods raise the interest of consumers which will lead to be in demand these products. Development of the distribution network also will increase dissemination of goods throughout country. These are strengths which will influence on the economy of the company. Let's talk about weaknesses. High dependence on competitors negatively reflects on the demand of goods, that is if competitor will reduce the price it will attract more consumers by low price of their product, whereupon company will be forced to decrease the price also to maintain the value of consumers. Likewise, dependence on suppliers has negative impact on quality and producing, that is if supplier by some circumstances will delay delivering of materials or deliver materials of poor quality the Company can not continue production process which will influence on the economy of the Company.

Recommendations

Nestlй takes a strong position on the market of Uzbekistan. Market of bottled mineral and drinking water in the Republic of Uzbekistan is a growing and perspective market.

To further promote of the brand Nestle it will be offered the following recommendations:

Develop new variants of water with various additives and vitamins

Maintain existed equipment and acquire merely necessary facilities.

Hire only qualified employees.

Sign agreement with suppliers to deliver all materials in time.

Nestle should create own web site in Uzbekistan, supporting native language. bottled marketing nestle

Create online market to improve the customer service.

Bibliography

About us | Nestlй Global. 2014. About us | Nestlй Global. [ONLINE] Available at: http://www.nestle.com/aboutus. [Accessed 3 April 2014].

Kotler, P., Keller, K.L., (2012). Marketing Management. 14th edition. England:Pearson Education Limited.

Marketing Management, 13e, Philip Kotler (PPT) ch 8. 2014. Marketing Management, 13e, Philip Kotler (PPT) ch 8. [ONLINE] Available at:http://www.slideshare.net/jaydip321/marketing-management-13e-philip-kotler-ppt-ch-8. [Accessed 3 April 2014].

Nestle. 2014. Nestle. [ONLINE] Available at:http://www.slideshare.net/bomarayag/nestle-8139996. [Accessed 3 April 2014].

Positioning Definition | Positioning Meaning - The Economic Times. 2014.Positioning Definition | Positioning Meaning - The Economic Times. [ONLINE] Available at: http://economictimes.indiatimes.com/definition/positioning. [Accessed 3 April 2014].

Pricing - Pricing Strategies. 2014. Pricing - Pricing Strategies. [ONLINE] Available at:http://www.tutor2u.net/business/gcse/marketing_pricing_strategies.htm. [Accessed 3 April 2014].

Target Market Definition | Investopedia. 2014. Target Market Definition | Investopedia. [ONLINE] Available at:http://www.investopedia.com/terms/t/target-market.asp. [Accessed 3 April 2014].

What is cost-based pricing? definition and meaning. 2014. What is cost-based pricing? definition and meaning. [ONLINE] Available at:http://www.businessdictionary.com/definition/cost-based-pricing.html#ixzz2PrCgq5Dm. [Accessed 3 April 2014].

What is market segmentation? definition and meaning. 2014. What is market segmentation? definition and meaning. [ONLINE] Available at:http://www.businessdictionary.com/definition/market-segmentation.html. [Accessed 7 April 2014].

«Нестле» отмечает 10 лет работы в Узбекистане - Газета.uz. 2014.«Нестле» отмечает 10 лет работы в Узбекистане - Газета.uz. [ONLINE] Available at: http://www.gazeta.uz/2012/12/25/nestle/. [Accessed 3 April 2014].

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