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Situation Analysis and Marketing Mix

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Situation Analysis and Marketing Mix

Nescafe is one of the popular brands for Nestle Inc. The brand is marketed in over 180 countries across the world. The company has developed a variety of marketing strategies to ensure that sales revenue is increased and sustained. Nescafe is widely sold in the USA; however, it faced challenges from other competitors and other beverages such as soda and tea. The paper seeks to analyze the vision and mission statements, strengths and weaknesses, pull and push strategy, integrated marketing communication, market segments and methods of measuring customer loyalty and retention.

Vision, Mission, Strategic Objectives and Values

Nestle’s vision statement is to produce high-quality foods that are safe and provide customers with satisfaction. Besides, the optimal nutrition brings wellness and health to the consumer. Nestle products contain essential ingredients that provide better taste and pleasure to the consumer. The mission of Nestle is to make high-quality products to enhance people’s have a better life.

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Nestle has various strategic objectives. The firm strives to comply with international standards on environmental issues. Besides, the firm continuously improves its environmental performance. Nestle establishes a good relationship among the government, consumers and business partners. The firm is concerned with the minimization of waste and conserves natural resources. Nestle adopts the latest technology in their production processes, measures its progress and analyses costs and benefits regarding their operations. Nestle’s core values include compliance with various regulations, the sustainability of its production and creating shared value with multiple stakeholders.

Strengths/ Weaknesses

Nescafe is one of the famous brands of Nestle’s products. The product’s strengths include its quality, diversity, brand equity, economies of scale and promotional campaign. Nescafe is of high quality compared to its competitors. The company has been able to control its production methods and produce high-quality to satisfy the needs of consumers. The product has diverse tastes brought about the variety of coffee beans and coffee used in the production processes. The product meets the different tastes of the consumers. The brand name has the most substantial value in its equity approximated to greater than $17.4 billion. Besides, resources are available to support the product. In the world, Nescafe is the leading brand of coffee and its produced in mass quantities. Moreover, economies of scale are achieved because the Nestle uses the same distribution channels for its product; hence, reducing the distribution costs. Nestle uses an excellent promotional campaign for Nescafe and it quickly attracts customer’s attention, which will lead to higher sales. Despite the product’s strengths, there are several weaknesses.  Beverages such as soft drinks and tea reduce the consumption of Nescafe. The competitors such as Star Bucks and Macfee also sell coffee and reduce the market share of Nescafe. The largest market for Nescafe is in the USA; the Nestle needs to find some other markets.

Push and Pull Strategy

Pull strategy aims to attract the end-users to buy a specific product; the advertising method will motivate the customer to demand the product. The technique is successful when the customers are already familiar with the brand. Examples of pull strategy include sales promotion and discounts, referrals, word-of-mouth and mass media advertising.  In a push strategy, the product is placed where it is visible to the customer; this ensures the existence product is known. The firm encourages the sellers to put their product in front of the consumer. Examples of push strategy include a point-of-sale display, product demonstrations and retailers being urged to stock the brand (Brocato, 2010). Nescafe is usually advertised through the push strategy.

Integrated Marketing Communication (IMC)

In IMC, the firm ensures all components of marketing are integrated and work in harmony (Juska, 2017). The four elements of the marketing mix (4Ps), promotion, pricing, product and place are linked together. The marketing tools have to work consistently at any given time. Besides, IMC communication tools for vertical, horizontal, internal and external are integrated and enhance proper marketing campaign. The Nestle employs IMC in the marketing of Nescafe.

Marketing Segments

Nescafe is sold in over 180 countries in the world. Nestle targets its customers through a mix of demographic, geographic and psychographic (Maricic & Djordjevic, 2015). Demographic segmentation is based on factors such as income, status, age, nationality, religion and family size. Geographic segmentation marketing is according to regions, such as the UK and the USA. Each geographic segment has a different attitude, values and lifestyle; Nescafe is processed to meet the needs of a given region. The psychographic segment is based on people’s interests, opinions and lifestyles.

Customers Loyalty and Retention

Loyal customers will frequently purchase the brand due to its perceived value regardless of the price. A firm should strive to retain its customers since a lost customer means a decline in sales. The customer’s loyalty and retention can be measured with metrics such as amount spent per transaction, the recent purchase, sale per customer, frequency of visit, active customer volume and retention rate (Renwarin, 2018).

Conclusion

Nestle has a strong vision, mission, objectives and core values that have provided its competitive advantage over time. The firm employs a variety of marketing mix to market Nescafe. The marketing mix used includes push and pull strategy and Integrated Marketing Communication. Nescafe strengths include brand equity, diversity, economics and proper marketing. The marketing segments are classified according to geographic, demographic and psychographic. The firm must develop measures for customer loyalty and retention.

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