Nestle

HUMAN RESOURCE HR is dedicated to their employees, and ensures that they have all the right people with the right skills, in the right places at the right time. Understanding that their people are the bedrock of all their business strategies, it is their mandate to enhance their skills with cutting-edge training and provide them with world-standard facilities. WHAT THEY BELIEVE IN: They are a people company. Their people are their greatest strength, and nothing can be achieved without their commitment and energy. The Nestle Difference

At Nestle you’ll find their self in a dynamic and invigorating environment, surrounded by people who are passionate about their work. You’ll feel empathized to contribute to the company’s business objectives and to achieve their own personal and professional goals. You and their colleagues shape and lead the organization – their energy is its greatest strength. Family ; Female-Friendly Organization: Diversity is central to the nature of their business. As a global organization, Nestle caters to the needs of diverse consumers.

This is only possible due to the diverse backgrounds and interests of their people and their firm commitment to embracing diversity at all levels. When they employ staff, they make a commitment to provide them with good working conditions. Female employees and their employees’ families know that Nestle Pakistan has a friendly and caring attitude. They recently set up a day-care centre, and have established a comprehensive Maternity Benefits Scheme for their female employees. Total Competitive Remuneration:

At Nestle you can be sure you’ll get competitive and fair remuneration structures. Their remuneration is benchmarked against other organizations and surveyed on a regular basis to ensure that they remain competitive. Their pay and compensation strategy is tied to the achievement of their business objectives. This linkage helps us define a growth-oriented culture, making us the most preferred employer in the market. The benefits of working at Nestle go beyond the financial. Here, you’ll find a structure to help you fulfill their ambitions and support their lives.

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Growth: New employees are given responsibility at an early stage, and high performers can develop fast. Their international and multicultural working climate is conducive to creativity, innovation and personal development. And you’ll get competitive working conditions, a compensation package and social benefits in line with their company’s high standards. Here, you’ll get the room to add value and make a real difference. If you’re qualified and ready to confront new horizons, you’ll have the chance for a truly international career. SAFETY AT WORK

Nestle is committed to being a leader in workplace safety and health. The Nestle Occupational Health and Safety Management System (NSMS) was revised in line with the 2007 edition of the international standard OHSAS 18001 and reissued to all Nestle operations, reinforcing our commitment that “Safety is non-negotiable”. They are also working towards external certification of our factories against OHSAS 18001. This will provide a common language around our health and safety management systems, and make it easier to demonstrate implementation of these standards to our stakeholders.

The number of workplace injuries has been reduced. For example, in 2007 the number of injuries leading to one or more days away from work in Nestle decreased to almost one quarter of that seen in 2001. RECRUITMENT WHAT THEY LOOK FOR: It takes a special sort of person to come and work at Nestle Pakistan. That’s why, when selecting candidates, they look for a set of interrelated characteristics encompassing three key areas: knowledge, personality and motivation. Professional Knowledge: Do you have a great academic record that demonstrates their intelligence, commitment and hard work?

Can you show us you have a sharp analytical mind, and the drive necessary to succeed in a competitive environment? If you think you fit the bill, you may be right for Nestle Pakistan. They look for good academic results at university or equivalent qualifications. However, the class of the degree you have obtained, though very important, is not the only criterion for selection. Other experiences during their studies, previous jobs, assignments, language theses and any other significant extracurricular activities and achievements, are also given the right.

They look for candidates who can identify a problem, analyze it, look at different options, and come to reasoned conclusions. They want people with drive and tenacity, energy and enthusiasm, who can initiate a project and follow through to the end. All these skills are vital during a career at Nestle Pakistan. Internships: Internships are a great way to apply the knowledge and skills you are developing at university and get experience in a leading corporation.

They offer project-based internship positions in various departments at Nestle Pakistan. You may be hired as an intern at various points during their academic career: during undergraduate study or graduate school. Most internship assignments are offered during the summer months and generally run for 6 to 8 weeks. At the end of the internship you will be required to submit a project or program report to the company on the topic assigned to you at the beginning of the internship program.

If you impress us with their talent & hard work, you may be considered for employment opportunities after you have completed their studies. Work/Life Balance: At Nestle they believe that the employee’s private and professional life should have a good balance. Not only because it reinforces employee’s satisfaction, loyalty and enhances Productivity but also because it positively reflects on the Company’s reputation. It helps attracting and retaining people and reconciles economical imperatives with they’ll being.

Nestle is willing to support employees who wish to take an active part in the life of the community or by assuming responsibilities in professional, civic, cultural, religious or voluntary organizations it being understood that any activity during working theirs be first approved by the Company. In the same spirit, Nestle provides flexible working Conditions whenever possible and provides its employees to have interests and motivations outside work. Relationship with Suppliers Nestle aims to deal only with reputable suppliers who are willing to apply Nestle quality standards.

Supplier relationships are benchmarked and evaluated with the objective of striving for continued improvement in the areas of quality, service, etc. As a relationship between a supplier and Nestle strengthens and progresses, it may evolve into one of preferred supplier status. Key suppliers with which Nestle has a contractual relationship are audited in order to ensure that they comply with the Nestle Corporate Business Principles or that they are working actively to achieve compliance. Whenever instances of non-compliance are brought to the Company’s attention, Nestle will demand that corrective measures be initiated.

Nestle personnel will maintain the highest standards of integrity and professional competence in all business relationships. Sanctions will be applied in the event of misconduct or abuse of established corporate standards and guidelines. PROFESSIONAL DEVELOPMENT: Learning: Learning is part of the Company culture. Each employee, at all levels, is conscious of the need to upgrade continuously her/his knowledge and skills. The willingness to learn is therefore a non-negotiable condition to be employed by Nestle. First and foremost, training is done on-the-job.

Guiding and coaching is part of the responsibility of each manager and it is crucial to make each one progress in her/his position. When formal training programs are organized they should be purpose oriented and designed to improve relevant skills and competencies. Therefore they are proposed in the framework of individual development programs. As a consequence, Attending: A program should never be considered as a reward. Adequate training programs are developed at the level of each operating company capitalizing on the availability of local, regional or global resource of the Group.

It is the responsibility of HR staff to assist the management in the elaboration of training programs. Great importance will be attached to programs enhancing the language skills of the employees. Training programs organized at the International Training Centre Rive-Reine aim at developing and sharing best practices of the various management disciplines practiced in the Group. They also strive to strengthen corporate cohesion as they’ll as to promote networking throughout the Group. Training programs should, as much as possible, be based on action learning and reduce ex-cathedra teaching to the strict minimum.

It is necessary to make optimal use of e-learning programs as a complement to or a substitute for formal training programs. According to needs they should be made available at shop floor level and enlarge the access to training. It is the role of each manager to assess progress achieved as a result of training Programs. Assessing and Developing each employee is in charge of her/his own professional development. However, the Company endeavors to offer the opportunity to progress for those having the determination and the potential to develop their capabilities.

Company Overview

Nestle, based in Switzerland, is the world’s leading food and nutrition company measured by revenues (Nestle, 2013). The company sells baby foods, breakfast cereals, coffee, confectionery, frozen food, pet foods, yoghurt and snacks through extensive distribution channels all over the world spreading out from facilities run by the company in over 100 countries. It owns several major consumer brands such as Stouffers, Nescafe, Kit-Kat, Carnation, Nestle water, among many others used by millions each year and which have established Nestle’s successful global brand image (Interbrand, 2013). This success can be attributed to clear focus and vision, as well as success in its continual differentiation and brand positioning which strengthen its market position (Jones, 2012).
To sustain this success and thus maintain leadership in its market, the company must often audit and review its strategic position in light of changing factors in its business environment. This paper undertakes this strategic assessment employing the PESTLE framework of analysis.

PESTLE analysis

The PESTLE framework is a strategic tool used to measure market potential and situation of company (David, 2009). It focuses on factors in the external environment which encompass effects from the political, economic, social, technological, legal and environmental spheres.
Political factors
With operations spread out across the globe, Nestle is liable to political influences unique to various jurisdictions including applicable laws and regulations governing business operations, as well as stringent international health and safety requirements of significance in the food and nutrition sector, such as the ISO 9002 and HACCP (Hazard Analysis Critical Control Point) preventative food safety systems. The primary goal of these regulations is the protection of consumers from poor quality, potentially health averse/harmful products (Hill, 2006). The company has suffered challenges related to contamination of its products and poor quality supplies which have led to product recalls and market concern. This has hurt the company’s image and impacted sales as well as challenging it with regard to quality control (Nestle, 2013). The company has responded appropriately to address these, to ensure quality and safeguard confidence in its products (Jones, 2012). For successful engagement internationally, Nestle should endeavour to meet these expectations and to conform to the requisite legislations and regulations applicable.

Economic factors

The global business environment has recently been significantly hindered by economic setbacks due to downturn and global recession. These have adversely affected demand for products through its effect on consumer spending. However, recovery has been swift and the continuing globalization and consolidation has further enhanced growth and demand for product with the convergence in consumer tastes and preferences globally (Hanson et al., 2011). The rise in emerging market economies portends surplus buying power, as well as economies of scale which proffer added economic advantage (Vandewaetere, 2012).
The leverage of huge resource capital and R&D capability into continual introduction and redesign of products enables Nestle to strengthen its competitive advantage. Through the localisation of operations in over 100 countries across the globe, the company manages to address the impact of foreign currency fluctuations on import and export aspects of trade (Jones, 2012).

Social factors

As a producer of finished consumer goods, Nestle is hugely dependent upon customer satisfaction and desirability of its product range to achieve success (Jones, 2012). The company, thus, chooses to embark on huge spending in its competitive sectors to maintain its brand image and to enhance product desirability. Competitive advantage in the sector requires continuous research and development leading to the frequent introduction of new products and redesign of products (Interbrand, 2013). This is a significant strength of Nestle and among the notable factors upon which its industry, sector or market leadership is based (Nestle, 2013).
There is an increasing trend towards healthy eating which is increasing demand for healthier food products. This is laden with potential to affect product lines such as chocolate drinks (Jones, 2012). The company has taken specific steps such as the acquisition of specialised start-ups, and successful partnerships to meet the needs of health conscious consumers and thereby to take advantage of emerging market trends and opportunities (Vandewaetere, 2012). Nestle is therefore considered to be well adjusted to its market segments given its focus on this growth driver as well as its focus on popularly-positioned products which aims to provide a brand to meet every need. Its more than 8,000 brands enable it to achieve this strategic focus and to compete successfully against corporate rivals (Interbrand, 2013).

Technological factors

The fast pace of technological development and associated capabilities portend significant challenge for competitiveness in modern industry. Nestle has endeavoured to keep up through enormous investments in research and development to enhance its capability, as well as process efficiency which have enabled its successful differentiation and enhanced competitiveness (Nestle, 2013). However, the company still experiences challenges in its quality control with its inability to provide consistent quality in food products hurting company image and affecting sales (Jones, 2012). The company’s response in this regard has been quite appropriate enabling it to weather this challenge successfully. It has endeavoured to ensure quality in the foregoing and to safeguard confidence in its products through its seal of guarantee initiative (Interbrand, 2013).
Environmental factors
Nestle is involved in numerous programs aimed at making the company more eco-friendly which are inherent in its CSR initiatives. However, the company is criticised for its weak approach and over the effectiveness of their programs (Jones, 2012; Interbrand, 2013). With the scale of their operations across the globe and massive quantity of output, it is imperative that the company should enhance focus on its environmental impact which is a notable concern in modern industry. This factor has capacity to ruin reputations and affect performance (Hill, 2006).

Legal factors

Global operations in diverse jurisdictions require astute legal capabilities which Nestle seems to be endowed with. The company’s successful operations in over 100 countries attest to this giving it an edge in unmatched geographical presence in the industry. It also has notable competency in mergers and acquisitions which have enabled it to diversify and to successfully enter new markets thereby sustaining its competitive edge (Vandewaetere, 2012).

Major challenges affecting the company
Three major challenges are identified and explored to gauge their effect and to find out ways in which they might be addressed.

Quality of products and supplies

A major challenge with huge capacity for adverse impact on Nestle’s business potential concerns the quality of products delivered and thus the quality control schemes for its products. There have been instances of contamination of products as well as poor supplies which have led to a number of product recalls from the market (Interbrand, 2013). This challenge is fundamental particularly with regard to operations in the food and nutrition industry which is subject to stringent quality, as well as health and safety regulations. The company is subject to a high bargaining power of customers for the most part due to the availability of a wide range of substitute and alternative products in the market and fierce competition from worthwhile rivals (Carpenter and Sanders, 2007).
Flouting of health and safety regulations also portends risk for operations in various jurisdictions and may lead to bans in markets and/or restrictions on the use of concerned products. This would definitely be a hindrance to business and would not only adversely impact sales but also would hurt company image and brand positioning which are vital intangible assets in a highly competitive market (Hanson et al., 2011).
To reduce the negative impact of this challenge, the company needs to tighten its quality control procedures and schemes for products and also needs to enforce stringent procedures in the choice of suppliers and in the procurement of raw food items from them (Interbrand, 2013). This would not only guarantee conformance with requisite legislation but would also ensure that quality is maintained and adhered to across the entire supply chain. Also essential are measures to ward off loss of consumer trust and drop in confidence in products offered. Assurances in this regard are critical for the maintenance of brand image and reputation, and as well serve to guarantee product performance in the market (Jones, 2012; Vandewaetere, 2012).
Weak implementation of eco-friendly initiatives
Nestle pursues eco-friendly initiatives as constituent in its corporate social responsibility (CSR). Yet, these initiatives have been subject to extensive criticism over weakness in its approach and over the effectiveness of their programs (Vandewaetere, 2012). Environmentally friendly initiatives are particularly of concern for such entities as Nestle given their scale of operations across the globe and quantity of product output considering its 8,000 product brands (Interbrand, 2013). The primary objective of the company is the delivery of the best quality in everything from primary produce, choices of suppliers and transport, to recipes and packaging materials (Nestle, 2013). However, every stage in its supply chain is bound to have adverse environmental impact which is a notable concern in modern industry given the drive to environmental responsibility. Disregard of such concerns exposes the company to risks to reputation which could have a direct impact on performance (Hanson et al., 2011).

Increasing trend towards healthy eating

With the rise in diseases associated with sedentary lifestyles, food choices, and eating habits, there has emerged global awareness of their impacts on individual health. This has engendered health consciousness and regard for choice of foods and their nutritive value or possible consequences. This has led to a trend towards healthy eating which continues to drive consumer preference and demand for healthier food products (Luthans and Doh, 2012). Such a trend is bound to affect popular product lines, such as chocolate drinks, that Nestle offers impacting demand and therefore market performance (Vandewaetere, 2012).
In its consumer goods business, Nestle is hugely dependent upon customer satisfaction and desirability of its products to achieve success. It is thus immensely susceptible to market dynamics and trends such as eh above which it can do very little to control and manage (Kazem and Richard, 2008). The problem is further exacerbated by the emergence of social media and global networking through the internet which continues to drive globalization and which is causing a global convergence of consumer tastes and preferences (Hanson et al., 2011; Luthans and Doh, 2012).
To counter this challenge, the company needs to embark on initiatives to develop a healthier range of products to cater to health conscious consumers and thereby to take advantage of the emerging trend and opportunities. Nestle should be keen to note the various dynamics and their impact on performance, and should develop flexibility which would enable faster response and adaptability to changes in the market (Jones, 2012). With a sound financial resource base, it is prudent for the company to pursue mergers and acquisitions, which it has done quite successfully, leveraging on its competence in that regard (Vandewaetere, 2012). This way, it is able to hasten its learning curve and guarantee success of initiatives (David, 2009) particularly in light of the fact that the company has an immense range of brands and a complex operational matrix which are in themselves quite a challenge to manage successfully.

Conclusion

Several factors affect Nestle in its international operations among them political, economic, social, technological, as well as environmental and legal factors, which are significant influences determining the success of operations in modern business environment. Three particular challenges are identified as having substantial impact on Nestle’s operations and business potential. They include: quality of products and supplies which portends loss of confidence in product; the company’s weak implementation of eco-friendly initiatives which are essential not only to check the environmental impact, but also serve as proof for goodwill to society; and, the increasing trend towards healthy eating which is a concern for future competitiveness of the company’s products. These challenges should be addressed to guarantee success of products in markets, as well as overall competitiveness.

References

Carpenter, M., and W., Sanders, (2007). Strategic Management: A Dynamic Perspective. Harlow: Pearson Prentice Hall.
David, F. R. (2009), Strategic management: concept and cases (12th Ed). Pearson, NJ: Prentice Hall.
Hanson, D., M., Hitt, R., Ireland, & R., Hoskisson, (2011). Strategic Management: Competitiveness and globalisation (Asia-Pacific, 4th Ed). South Melbourne, Australia: Cengage Learning
Hill, C., (2006) International Business: Competing in the Global Economy, (7th Ed) Maidenhead: McGraw-Hill
Interbrand (2013). Best Global Brands 2012. Accessed 1/9/2014 from: http://www.interbrand.com/en/best-global-brands/2012/Best-Global-Brands-2012.aspx
Jones, S., (2012). Strategic Management at Nestle. Accessed 1/9/2014 from: http://www.articlesbase.com/management-articles/strategic-management-at-nestle-5907881.html
Kazem, C., and L., Richard, (2008). Sustainable competitive advantage: towards a dynamic resource-based strategy. East London Business School: University of East London, UK.
Luthans, F., and J., Doh, (2012). International Management: Culture, Strategy, and Behaviour, (8th Ed). Maidenhead: McGrawHill
Nestle, (2013). Annual Report – 2013 (English). Accessed 2/9/2014 from: http://www.nestle.com/asset-library/Documents/Library/Documents/Annual_Reports/2013-Annual-Report-EN.pdf
Vandewaetere, B., (2012). Personal Interview – 28th November, 2012: Responsible for European Affairs, Nestle. Accessed 2/9/2014 from: www.Nestle.com

Introduction

The case is related to Nestle Refrigerated Foods and provides a detailed look at the use of simulated test markets to forecast a new product’s potential. Stephen Cunliffe, the president of the Nestle Refrigerated Food Company (NFRC) is seriously pondering the introduction of a refrigerated pizza to the refrigerated food category. In the late 1980s, NFRC had successfully launched refrigerated pasta and sauces to the US market. The product was an immediate success, with sales of over $50 million in the first year. Sales grew to $100 million by 1990, even with the entry of a strong competitive product by Nestlé’s International rival, Kraft. At the time of the case, however, the pasta market is showing signs of saturation and NFRC must decide whether to launch its newly developed pizza product. The case illustrates the new product development process followed by Nestle for its successful pasta introduction. It is also an introduction to simulated test markets and provides a detailed explanation of the BASES(a market research firm) model used in Nestlé’s new product forecasting. It outlines the pizza business opportunity and questions whether NFRC should proceed with the launch.

Problem definition

The Primary decision for Cunliffe to be taken is whether to launch Pizza or not. And if it is to be launched then the following questions need to be answered:

1. Which form of pizza to be launched, the pizza “kit” or the pre-assembled, heat-and-eat pizza?
2. How large a market could be targeted?
3. What market share could be achieved?

Analysis

At the very onset, let’s analyze the Pasta launch. A commendable outcome indeed is a result of risky initiative. Following risks were taken while the launch of Contadina pasta and sauces:

A small company, Lambert’s Pasta ; Cheese was acquired at a premium in order to be the first company to bring refrigerated pasta to market on a national basis. Heavy investment was done in distribution to get the product to market without high spoilage rates.
Brokers were used to sell the product, instead of using the traditional sales force.
As a result, the product was huge success and Contadina became the market leader in refrigerated pasta and sauces. But to continue the rapid growth NRFC needed other new product opportunities.

Here it is worth noting that the tests used were BASES tests. Let’s analyze the strengths and weaknesses of the BASES I (concept test) and BASES II (concept + taste test). Both tests measure market potential to a degree. The results can be used to gauge level of awareness and possible usage of a product as well as to understand customer’s perception of the product/brand. These results can be used to potential sales and marketability of the product. However, the BASES I test do not utilize any actual products (taste testing) to ascertain customer reaction. It depends solely on the replies from potential customers to forecast marketability and impressions of the product. This type of survey can be conducted quite quickly with relatively little expense. On the other hand, BASES II includes a taste test along with its concept test to gather similar information for forecasting. Hence, the results could find relevance in Pizza case also.

Now let’s consider the problem statements for the case. The first question is whether to launch pizza or not. This decision would depend on the obvious financial viability of the product in the long run. Thus the estimated demand (trial and repeat) for the two pizza options under consideration by the firm {the pizza “kit” (containing a crust packaged together with separate packets of cheese and sauce) and the pre-assembled, heat-and-eat pizza} could be considered.

For the two categories, a preliminary concept test was conducted by MRD .findings from the study were promising. Positive purchase intent for the kit was about 58% overall whereas for the pre-assembled option positive purchase intent was approximately 52%.From the exhibits, where mean concept attribute ratings before trial are given, results indicate that people believe that an assembled pizza is less likely to have a soggy crust. Also read an essay Pizza Hut business strategy

Further investigation by the R;D group indicated that the refrigerated pre-assembled concept was infeasible from a production standpoint. Not only did the flavors of the sauce and toppings migrate into one another, but also the sauce and toppings infiltrated the crust resulting in a poor quality product. The kit product was feasible. Also the national distribution was a possibility.

Taking the cue from the case of pastas and sauces, the key determinant o f the trial volumes was the trial rate forecast. Research results are analyzed as follows:

• Pizza and topping
• Pizza only

Concept purchase intent

17% definitely would buy

59% would probably buy.

Adjusted trial

adjust trial:

(80%)(15%) + (30%)(43%)=24.9%
ENVIRONMENT ADJUSTMENT

Seasonality

Environment adjustment

Seasonality

Marketing plan adjustment

$13 MM advertising=2330 GRPs =48% awareness

58%  ACV

(31.3%)(48%)(58%)=8.71%

In the above analysis certain assumptions were that the environment adjustment and the marketing plan adjustments for pizza ; topping and pizza only are same as that used for pasta. Also, as no actual product had been used in the concept test, we can use consumer reaction to the concept. Hence I took target households as 77.4 million. In exhibit 21, there is a big difference between Contadina users and non-users on the “top two box” scores. This will obviously affect the forecast depending on what proportions are used for Contadina users versus non-users in the population. Besides this Nestlé’s marketing research departments cautions us that parent brand image could vary from 5% to 25%. It would be worthwhile to judge the sensitivity of the forecast under 5%, 15%, and 25% parent brand penetration scenarios.

 Introduction: Success toady in the competitive world has become very difficult. This is because it does not solely depend on basic factors but on all the factors related to the organisation.

Earlier it was possible for an organisation to dominate in the market but today due to lot of different methods, channels and modern tools for marketing and functioning of the organisation, the world has become very competitive. In this assignment the author is concentrating on two major players in this competition, the distribution channels and the sales force. The company in discussion here is Nestle UK and the product for narrow research is Nestle’s own most successful brand “Kit Kat”.

Nestle homes itself in Switzerland since 1867 today is one of the world’s most successful organisation in the FMCG category. www. total-logistics. eu. com, accessed 08 August 2010) It started its UK activities around 100years before and started their own manufacturing unit. Today Nestle has 8 manufacturing plants in UK with two head offices in Croydon and Dublin. (www. nestle. co. uk, accessed 08 August 2010) Distribution Channels Structure: According to Brassington and Pettitt, a channel structure is a route selected in order to move the product to the market through different intermediaries. This is the distribution channel structure which proves vital for the smooth movement of the product and making it available to the end consumer.

Distribution Channel Structure forms the fourth element of the Marketing mix for any product. The ‘Place’ element, and therefore it becomes an important factor. There are various channels of distribution adopted by various companies according to their product requirement and strategies. Apart from the above said vital function of a distribution channel, it has various other functions like: 1. Gathering market information which includes market research that helps future market planning. 2. Searching potential buyers and communicating them. 3. Doing promotional activities. 4. Achieving buyer specific demands and requirements. 5.

Deciding on offers and pricing issues. 6. Storage and transportation of goods. 7. Managing funds required for functioning of the distribution channels. (www. tutor2u. net) Nestle adopted a strategy that their products should be made available in all the parts of UK and that they should not be falling behind for the supply, basically called as the ‘whenever’, ‘wherever’, ‘however’ strategy of distribution. In order to achieve this they needed a strong distribution network which supported their strategy and was cost effective. According to marketing department of Nestle UK they had analysed the following different channels of distribution.

Single Tier Distribution Network: Producer – Retailer – Consumer Two Tier Distribution Network: Producer – Distributor – Retailer – Consumer Multi-Channel Distribution Network: Producer – Distributor – Regional Distributor – Wholesaler/Retailer – Consumer (www. nestle. com, accessed 08 August 2010) Owing to the huge retail market in UK the single tier distribution was almost impossible for Nestle to adopt as the distribution for Nestle directly would have become very complicated and the product strategy could not have been achieved.

So they opted for multi-channel distribution network and appointed their own major distribution points at Bardon in Leicestershire and York in North Yorkshire. Bardon handles the food and beverage industry of Nestle in UK and York handles the confectionery industry of Nestle. The product in discussion here is Kit Kat which is distributed from York distribution centre. The physical distribution is done by trucks carrying composite palettes. The transportation is appointed by Nestle and is dedicated only for Nestle. York is a huge hub of confectionery and has heavy storage capacity to cater the market needs.

Kit Kat being highly popular in the market there is continuous distribution running round the clock for Nestle. The demand in the market though fluctuating is handsome and so Nestle deals with it very efficiently. This generates high profit for Nestle as compared to other products. Nestle has their own regional distribution depots which are so placed that they cover the whole of UK. Kit Kat is transported from the national distribution centre at York to the regional depots as and when the requirement is put on. These regional depots then supply pallets of Kit Kat to the whole sellers in the market.

In UK Asda, Tesco, Sainsbury’s, Waitrose, Morrisons, etc. are the major wholesalers those purchase huge stock from Nestle. (www. nestle. com, accessed 08 August 2010) All this is supplied from the regional depots. These whole sellers are direct retailers as well. So Kit Kat reaches the consumers from them as well as from small off license and small retailer shops. Terms of Appointment and Incentives for Distribution Channels: The distribution channels and its elements are all a part of the distribution strategy for any product.

In order for the smooth functioning of the channel there are some terms and conditions between the company and the distributor. This is an agreement between the two over the products. The following are the mainly considered point in the appointment of any distributor as per UK law. 1. The Parties: are the guarantors needed for any obligations of the distributor 2. Territory/Products: The place and its boundary that the distributor is allotted for sale. The products the distributor is allowed to sale and many times the clause of new products that they get added automatically or new agreement has to be done each time. 3.

Nature of Appointment: The company may reserve right to sell the product directly in the same territory or if needed can appoint a new distributor in the same territory. This point can be a complete no or flexible. 4. Duration of Appointment: The length of agreement or contract between the company and the distributor, as in fixed term or short term. If the contract is short term then the notice period has to specified, if it is a fixed term then the exact duration needs to be specified. There can be a linkage of the duration to the distributors performance say above a certain level then certain duration if not then discontinue.

There also can be a probation period allotted for the distributor wherein the performance can be evaluated and then agreement can be decided. 5. Obligation of or restrictions on distributor: These are generally related to the sales, promotion and advertising of the product. The rights can be kept by the company or can be given to the distributor. This point also refers to any requirements for sales in the territory say government licenses, quality certificates, pollution certificates, food and drug licenses, etc. The agreement also clearly states the cost bearer of all these permissions and licenses e. . the company or the distributor.

This also covers for any taxes or duties that need to be paid for any particular territory, etc. 6. Intellectual Property: This point in the agreement covers for any patents, trademarks, particular registered designs, technical know-how, and other product related factors held by the company. This point covers for the permission needed if any by the distributor to use product factors for selling. Also the need of any license to use certain elements that the distributor needs to take before taking the distributorship.

In some cases like if the trademarks are owned by the company the distributors are appointed as the registered users. 7. Termination: This covers the termination period and conditions in which termination can take place from both sides the company and the distributor. The notice period before the termination, if termination is due to some underperformance then any rectification time that is allotted to improve, etc. is a part of this clause. 8. Effect of Termination: In case of termination of the agreement the effect of it on the existing orders, stock already at the distributor, etc. elated information comes under this clause.

If the distributor needs to sale the stock back to the company, what will be the cost at which he can sale? All these terms are covered under this point. 9. Notices: In some cases the headquarters are not in UK, so the jurisdiction of the territory may need a UK address for the notice. This is cleared under Notices point. 10. Arbitration: This applies only if needed. And if needed, the language and the place of arbitration are clearly mentioned in the agreement. 11. Relevant Law: This covers for any specific laws those required for the agreement.

The jurisdiction of the territory is fixed. Many times the parent company is in other jurisdiction or vice versa, so the binding jurisdiction is decided and clearly mentioned in the agreement. 12. Notification: Some territories may require additional registration or notification in the local registering bodies; this is also mentioned in the agreement. (Weise, 2007) These are some standard and basic points covered in any appointment of distributorship. Nestle also follows the local law and has these sort of agreements are done with their distributors.

Nestle incentives are very tempting for its distributors as nestle opts for win-win situation strategy. This helps them to keep the product moving always. Majorly two types of incentives are given to the distributors. Sales based commission in percentage of sales target achieved and holiday packages to exclusive tourist locations. (Demirag, 2010) The first one is major of the two as it depends on the performance of the distributor, the more the sales the more the commission. This is purely in the hands of the distributors so it is easy for them to achieve more incentives.

These incentives affect major sales of any product. Reporting, Control and evaluation system for their sales force: Salesforce plays another vital role with distribution channels because it is a major element of the distribution network that works individually. Any organisation should have a proper channel of reporting, control and evaluation of the sales force. Salesforce management is of utmost importance as they face the customers directly and hence the reputation of any company is somewhat dependent on them.

Success or failure is somewhat directly related to salesforce performance (Venugopal, 2006), therefore proper reporting, control and evaluation of the same needs to be very strong and clear in any organisation. (Muczyk and Myron, 1987, et al cited Venugopal, 2006). Reporting of sales force is completely dependent on the hierarchy of the organisation and it differs from country to country and organisation to organisation. The reporting is from daily to weekly to monthly basis. Reporting is done by filling forms or computer generated sheets, emails and now a days through software.

Reporting is usually to the regional managers in the sales department. (Marks, 2008) Software’s are becoming popular as the data can be available for the senior management to evaluate and check anytime they want. Salesforce performance needs to be evaluated through various methods in order to achieve maximum sales. Marks in his book explains’ about the evaluation techniques and methods of salesforce. Monthly audits and performance mapping of individual person in the sales team gives a clear idea of the performance of each individual. This helps the sales manager to design his team and decide the future actions and plans.

Target setting also can be done with useful data from evaluation process. Based on this evaluation the salesforce needs to be compensated with rewards. This serves as motivation to work more efficiently. Regular training and meeting with senior and experienced staff helps improve selling methods and way of work. For Nestle the sales team has monthly orders from the big wholesalers like Tesco, Asda, Sainsbury’s, Waitrose, etc. Kit Kat being highly popular it comparatively easy for the sales team to achieve the set target due to high demand as a result of the popularity.

They work on credit accounts that are opened initially after a small credit check and then the terms of credit period and payments are decided. Recommendations and Conclusions: Overview of Nestle UK concludes at a point that they have one of the best practices in the functioning of the product process in the market for Kit Kat. The only recommendation is that use of the railway network in UK in order to fast supply of the goods and reduction in time factor. This will improve their efficiency in the market and they can achieve the target sales smoothly without any shortages.

In order to have a healthy business salesforce need to be motivated and kept happy. They are the major players in getting the business for any organisation. (Zoltners, Sinha, Lorimer, 2004) Any organisation selling product is complete only if they have a proper distribution structure and effective and efficient sales team. (Johnston and Marshall, 2010)

Nestle Promotion Strategy. – Writing 1 Casestudy February 7, 2010 Nestle constitutes the bigger corporation in the field of research and technology of foods. Her annual investment in Research and Growth is the biggest of the branch while her personnel in this sector exceeds the 3. 000 people.

The Nestle Research Centre in Lausanne, where is carried out the basic research, is recognized globally as one of the leading centres of researches in his type with above 300 publications in valid scientific publications each year. The main activity of Group Nestle, which constitutes the bigger enterprise of foodstuffs worldwide, is focused in the sector the general and special human diet.

Even if initially her work was based on the milk and the special products of diet for children, many still products were added in her activities with the byway of years, such as chocolates and (CRUNCH, CAILLER, KIT KAT, AFTER EIGHT, SMARTIES etc), coffee (NESCAFE, etc), drinks (NESTEA, NESQUIK etc), cooking products (soups, broths and mash MAGGI, pastas BUITONI, tins LI[B]BY’S etc), products of refrigerator (yoghurt CHAMBOURCY, ice-creams NESTLE, MOTTA and CAMY, desserts etc), natural metal water (PERRIER, VITTEL, SAN PELLEGRINO etc), frozen products (LEAN CUISINE) and products of cerials (FITNESS, CLUSTERS, CHEERIOS etc).

Also,in our days NESTLE is taken action in the sector of products of diet of small domestic animals (FRISKIES, GOURMET, FELIX etc), as in the sectors of ophthalmologic (ALCON, OPTI – FREE etc), dermatological pharmaceutical and cosmetic products (NUTRADERM, BENZAC etc). In Greece, Nestle has presence above 100 years and constitutes today one from the bigger industrial companies of foods and drinks. The group Nestle in Greece is today constituted by the companies NESTLE GREECE S. A, NESTLE GREECE ICE-CREAMS S. A, GROUP of CERIALS GREECE. and ALCON INTERNATIONAL GREECE LTD, has totally in 4 factories and occupies in total 1350 people.

For the 2006 it realised turnover of 460,6 millions of Euros, with profits above 70 millions of Euros. Chairman and Directing Adviser of Group in Greece is Mr Evangelos Kaloysis which, then long-lasting international military service in the maximum levels of Nestle, undertook also the responsibility of wider region of South-eastern Europe that includes the emerging markets of Albania, Bulgaria and FYROM, as well as Cyprus. It should be marked that the bigger percentage of annual turnover of Group in our country makes from products of factories of Greece.

In this assignment we examine and analyze the promotion strategy for the product of Nestle which is named Fitness nestle and it is breakfast cereals mainly for women. The fitness product is the best for women ‘line’. Fitness breakfast cereal helps women manage their line in a sensible way. Fitness helps women not only take off weight but also keep it off as it is made with delicious whole grain flakes. Research shows that women who eat more wholegrain tend to weigh less and are less likely to gain weight over time. Fitness also contains essential vitamins and minerals.

Analytically the ingredients for the product are Kellogg’s Special K Cereal (51%) (Rice, Wheat {Wholewheat, Wheat Flour}, Sugar, Wheat Gluten, Defatted Wheatgerm, Dried Skimmed Milk, Salt, Barley Malt Flavouring, Vitamin C, Niacin, Iron, Vitamin B6, Riboflavin (B2), Thiamin (B1), Folic Acid, Vitamin B12), Glucose Syrup, Chocolate Pieces (11%) (Cocoa Mass, Sugar, Emulsifier {Soy Lecithin}), Fructose, Dextrose, Sugar, Humectant (Sorbitol, Glycerol), Vegetable Oil, Emulsifier (Soy Lecithin), Antioxidant (E320). First of all it will be defined the target audience.

Geographically the whole region of Greece will be in target. Everywhere in Greece exists a supermarket which offers Nestle Fitness product line must be part of the target. In conclusion geographically there are no limits. Thus , all city sizes will be concluded. In order to be more specific for the target audience will be defined the demographic characteristics. Firstly both gender can use the product, but mainly women are the potential and major consumers, thus women will be focused. Fitness product line is addressed to individuals from 18 to 37 years old.

Family status for these individuals is young, single, young married with no children and young divorced. Income segment target is ;= 10000 annual salary. Demographically exist no other constraints. Phychographically the target will consist individuals with lice style status upon the general average and their personality will be characterized as ambitious and selfish. Behaviouristic the target audience will be strong loyal , heavy and regular users, and their market factor sensitivity is more advertising. The promotion strategy will be planned only for a part of the product line of fitness, which need a push.

Fitness bars is a line of 7 different flavours. Each flavour has a unique taste but common scope. The price of one package is 2. 57 euros and contains 6 bars. The main competitor is kellogs, which sales the same package in different flavours 2,61 euros. In order to gain a competitive advantage and gain a bigger market share Nestle will apply specific strategy to the promotion. In the spectrum of promotion strategy, this method contains different types of energies. First of all the action , which will take place into the place a consumer can purchase the product.

Mostly this point will be in supermarkets or other types of stores where Fitnees bars are sold. A hard-paper stand will be set at the 300 biggest supermarkets. That stand will announce to the potential customer the special offer of the product. That offer will be a 0,30 euros discount and a membership to a contest. The action should represent AIDA’s principles. Attention, Interest, Desire, Action. Attention will be paid by the effectiveness of the stand. Stand will be constructed like a huge Fitness bar with horizontal sleeves and attractive colours.

The basic colour for the background will be yellow, because has high impact to catch consumers eye particularly when used with black. After, the board will be in green, because this colour is a symbol of health and freshness and popular for mini products. Inside the packing will be concluded a coupon, in which the purchaser will have the possibility to take part to a contest with a winning prize of free annual membership fee in a popular gym. For this action the costs are: 5000 euros for coupon production, 25000 euros for the stands and no cost for the gym because of a deal.

The second part of the promotion strategy, which will follow after the 20 days length of the first action is to promote the fitness bar product line to potential consumers through scientific dietician and nutritionist persons. In Greece exist around 1. 000 people with the previous characteristics. The action will be focused only to the top 150. These persons will be supplied with promotion material, which will explain in scientific terms product healthy characteristics. More specific, Nestle will provide material, which will illustrate the whole product line of the bars and give them as a present posts with a subject from the health world.

In addition 10 packages of the product will be send to these persons. The costs of these are: 1500 euros for the material, 3000 for the posts. Finally the last action of the promotion strategy is to approach the 100 biggest gyms around Greece and offer them the range of the bar product with the effectiveness of 50% discount. In that way, Nestle makes two goals. First net sales, even with a good discount and secondly a presentation of the product into the place where the target audience mostly can be found. Totally the costs of these promotion actions will be around 35000 euros. According the desired sales results, costs sound tiny.

Desired results are a market share boost of 5% for the next 6 months and an estimated 6% sales growth for the next year. References “NestleWatch. org”. NestleWatch. org. http://www. nestlewatch. org. Retrieved 2010-01-08. “FoodAndDrinkEurope. com”. FoodAndDrinkEurope. com. 2007-12-05. http://www. foodanddrinkeurope. com/news/ng. asp? n=81829-nestle-vivartia-milk-prices. Retrieved 2010-01-08. “Nestle: Following the Customers’ Tracks with Google Analytics”. Google Analytics. Archived from the original on 2007-02-20. http://web. archive. org/web/20070220225956/http://www. google. com/analytics/case_study_nestle. html. Retrieved 2007-02-21