Macro Environment of Nestle

Macro Environment of Nestle Nestlà © is the worlds largest food company and has held offices in the UK as early as the 1860s. Nestlà © was originally made up of three major companies: Nestlà ©, the Anglo- Swiss Condensed Milk Company and Rowntrees of York. In 1905 Nestlà © merged with the Anglo-Swiss Condensed Milk Company and quickly became known for infant formula, chocolates and tinned milks. In 1939 Nestlà © launched Nescafà © in the UK, which became an immediate success for instant coffee (Nestlà © UK, 2012). In 1988 Nestlà © obtained Rowntrees of York and has since invested over  £200 million into the York site and  £100 million in their Tutbury factory. Between the years of 2006 2011, Nestlà © invested  £224 million in their UK sites (Nestlà © UK, 2012). With 6,500 employees across 20 different locations in the UK and exporting as much as  £300 million worth of products each year to 50 different countries, Nestlà © is not only a major employer in the UK, but also one of the UKs food industrys major exporters (Nestlà © UK, 2012). In 2002, Nestlà © UK acquired Ski Yoghurt from Nestlà © Australia and six years later in 2008, Ski Yoghurt was re-launched with only natural ingredients combining real fruit with thick, creamy tasting yoghurt and no artificial colours, flavours or preservatives (Nestlà © AU, 2012). 1.2 Previous Positioning of Ski Ski yogurt is currently positioned as a naturally delicious product and its positioning strategy focuses mainly on its fruit heritage and its value to the consumer. After the last re-launch of 2008, the new re-designed packaging tries to connect ski back to nature and puts forward an all natural ingredients story by featuring plenty of fruits in their natural environment for every flavour (Appendices 9.1). 2. Situational Analysis 2.1 Macro environmental analysis In the analysing of the macro environment of the product category, PEEST analysis is used to identifiy five main forces which affect marketing decision-making. The five forces analysed are political-legal factors, ecological-physical factors, economic factors, social-cultural factors and technological factors. (P)olitical Legal factors: EFSA bro-biotic dossiers companies that have vested interest in functional health adopt a more cautious approach or focus on benefits that have secured EFSA approval (Mintel, 2012). Trade negotiations under WTO. Bilateral trade deals (Doha, 2011). Compliance with legislation is becoming more costly April 2012 Dairy UK intention to sign up to the Department of Healths calorie reduction pledge which aims to support and enable consumers to eat and drink fewer calories on daily bases. (E)cological Physical factors: Environmentally friendly, reduced packaging is being promoted by the government (recycling good for corporate social responsibility image) Climate change adaptations Water management is an emerging priority (E)conomic factors: Unemployment rates on the rise, reaching 8.4% during January 2012 (Trading Economics, 2012) Economic growth of the market UK yoghurt market grows in a slow but steady pace over the last year at a rate of approximately 2.5% (Mintel, 2012) (S)ocial Cultural factors: Good intentions, such as not snacking between meals and eating more fiber, have become less of a priority in the recent years. Preoccupation with trying to loose weight Adults within a family are expected to remain the largest population segment Strong growth expected in the number of children between 5 and 9 years old Projected increase of one-person households (contribute less to volume sales of yoghurt). (T)echnological factors: The use of the internet through online grocery retailing directly influenced the supply chain, operations and processes of grocery and food retailers Online retail shopping has gained considerable popularity due to the increased accessed to broadband internet in the UK; 70% of overall market are broadband users (Keynote, 2010) Lack of applied RD and knowledge exchange as Government reduces funding 2.2 Micro Environmental Analysis In order to analyse the companys both internal and external environment, the SWOT analysis is used to identify the strengths and weaknesses of the organisation as well as the opportunities and threats from within its market environment. SWOT Analysis: Strengths Ski is apart of a global established brand Nestlà © Nestlà © stands for product Innovation Strong promotional activities e.g. Exclusive gifts as a part of their promotional offers Product availability and distribution to all major stores Perceived as a quality brand Strong historical background One of the first in the yogurt market Strong ability to recover from market share loss in the short term (2008) Weaknesses Frequent re-launches over the years lacks consistency Weak TV advertisements Very weak presence on social media platforms less interactive and informational, lacking updates Current positioning is not consistent with the current image of Ski, therefore its losing its roots Frequent re-launches over the years lacks consistency Opportunities Over three quarters of yogurt users view Ski as a healthy alternative to other treats (Mintel, 2012) Use of social media is growing extremely fast Backing of Nestle known as a established brand Spoonable yogurt represents over four fifths of the yogurt market (87%) (Mintel, 2012) Consumer engagement Capitalize on organic/historic brand positioning Increase of online advertising Increase of use of internet Increase of nutritional awareness Threats Decrease in popularity Higher competition from competitors Competitors stealing market share Due to the Economic downturn consumers switch to store-brands (Mintel, 2012) Customers choosing healthier or non dairy yoghurt options Brand loyalty Customers not making the switch from their usual brand to trying Ski Only gaining an older demographic because of history and recognition Nestle boycotts within the UK 2.3 Market Trends Overall since 2007, there has been a 0.9% increase in the eating of yoghurt, with an increase 7.1% in heavy users, and decreases of 1.9% and 5.2% in medium and light users respectively. The yoghurt market in the UK is saturated, making it hard to add new users. Yoghurt is considered a healthy option, with low fat varieties making up 56% of purchases. The growth of low-fat yoghurts, at 1.9%, has been faster than that of standard yoghurt, at 0.6%. Those in families are more likely to eat yoghurt compared with those not. The group that buys the most yoghurt is that of women and households with children aged 1-9. An increase in the number of 5-9 year olds of 11% is expected between 2012 and 2017, meaning the number of people in the above group will expand, giving potential for more growth. More affluent families are also more likely to be consumers of yoghurt, and are likely to consumer more of it (Mintel, 2012). 2.4 Competitors Within the dairy market in the UK, retailers own-label products have significally increased the competition since due to the economic downturns of the last several years, consumers tend to switch towards them. The two bigger players of the market are Danome and Muller which together capture 60% of the spoonable yogurt sales and continue to dominate the market. The direct competitors of the Ski yoghurt are Activia, Muller, Yoplait, Yeo Valley, Onken, Munch Bunch, Weight /watchers and own-label products (Appendices 9.2). 3. Objectives The roles of objectives play an important part of the overall campaign. Both the marketing and communications objectives provide direction, focus, values, and a time frame, while also providing a means by which the success of the campaign can be evaluated (Fill, 2009) 3.1 Marketing objectives Increase market share by 1% by June 2013. Increase volume of sales by 20% by June 2013 3.2 Communication Objectives Increase re-launch brand awareness by 30% by June 2013 Impart nutritional knowledge, brand heritage and Ski yoghurt diet plan to both males and females, ages 25-40 within the first 2 months of the re-launch. Build project the position of a healthy, active, and convenient product image of Ski to both males and females, 25-40 years old within the first 4 months of re-launch. Increase shelf space in supermarkets by 20% by June 2013 Expand saturation on trade grounds by 15% by June 2013 20,000 consumers to sample the product by the end of the campaign-June 2013 4.0 Consumer Strategy 4.1 Segmentation Demographic Trends According to Mintel (2011), The group that buys the most yoghurt is that of women and households with children aged 1-9. The current target market of Nestlà © is working mothers, aged bwtween 35-44 years old with older kids. However, an 11% increase in the number of children aged 5-9 year olds is expected between 2012 and 2017. (REPEAT and needs a Reference). This gives potential of growth and more affluent families being more likely to be yoghurt consumers, and are likely to consumer more of it (Mintel, 2011). In terms of social class, AB, C1 and C2, social class who are professionals, supervisory and skill manual workers, the geographic location of these classes is in United Kingdom. Hence, the yoghurt market should focus on British customers to gain an effective marketing strategy. Behavioural/Psychographic Trends The reason being that British customers are more concerned with their health. More and more, they consider calories consumed and fat content to ensure that they are eating well. Their healthy lifestyle can safeguard them from the widespread obesity epidemic (Key note, 2012). Some customers, who find themselves lack of time having proper food, consume snacks instead of main meals. Yogurt is the choice of healthy food of this target market, containing essential nutrition to make them healthier (Mintel, 2011) 4.2 Target Audience Ski Yogurt is marketing to group of people who prefer natural yogurt products in effective quality and sufficient quantities. This target audience covers; working mothers aged 25-50 with older children. Our target audience would be A, B, C1 and C2 (Appendices 9.3) which primarily concern with health and nutrition. We will expand our target audiences network with family who would like active activities and has busy lifestyle. 4.3 Pen Profile Within the Ski consumer strategy, young families, especially mothers who take a considerable interest in both their appearance and health will be targeted. In addition, young working people that like outdoor activities such as exercising, walking, and socializing. Also, someone who is of a higher social class, and will therefore typically think more about nutrition in trying maintain a more attractive physical appearance. A good approach to reach the target audiences is through advertising messages on television; press media and outdoor media that attract the consumers. Alternatively, a more efficient communication network is through social media such as Facebook and Twitter. Accordingly, marketing activity will adapt and respond to changes in customer behavior. 4.4 Positioning The aim of the campaign would be to maintain the current positioning of Ski as a healthy and natural product choice and focus on strengthening the healthy aspect of the product as well as introducing the convenience factor. The ultimate goal of the campaign would be to move Ski yogurt towards a healthier position among the competitors within the perception map (Appendices 9.4). 4.5 Creative strategy Strap line: How do YOU doSKI? From Skis previous re-launch in 2008, it has been positioned as a brand with high nutritional value using only natural ingredients, and no artificial colours, flavours or preservatives (Nestlà ©, 2012). The Ski UK brand is one that naturally composes historical and nutritional value while also being backed by Nestlà ©, one of the biggest food distributors in the UK. Starting in January of 2013, Ski UK will begin their re-launch by focusing on the promotion of new beginnings, and will accordingly play an important role in influencing consumers to aim for a healthier and happier lifestyle in the new-year. By enhancing their current traits, the re-launch and creative strategy of Ski will be positioned as an active brand with high nutritional value and convenience for those with a busy lifestyle. In order to support the re-branding of Ski, the colours will change from its current blue, white and red to a more unique and fresh white, black and green. The new colour of Ski will directly reflect the active and green-friendly image of the brand. Ski yoghurt will be seen as a product that will enhance your overall health, happiness and lifestyle. The logo will also change to differentiate Ski from its competitors and to reflect the new positioning of the overall Ski UK brand. Also, the Nestle logo, currently on the packaging will become smaller to give the consumer the feel of a more organic, and family-owned product (Appendices 9.5). It is shown that the attractiveness of packaging affects the volume of sales and packaging can be essential in affecting the positioning of a product (Fill, 2009). In order to attract the attention of Skis target market, the packaging of Ski will become more durable, sustainable and pleasing to the eye to reflect the new active and green image of the brand. The basis of the re-launch will be based around the new slogan: How do YOU doSKI? In the advertisements, the produced concept will introduce new ways of eating and using Ski yoghurt. People will be shown how they can DoSki. This will be shown through sports activities like football, young professionals with busy lifestyles and health-conscious families. The look and feel of a product will change while still holding on to its natural heritage and nutritional value. The overall goal within the Ski UK re-launch and creative strategy is to enhance the product. 5.0 Communication mix 5.1. Media Planning The media plan of the campaign will take place within a six month time period, which is broke down into 24 weeks for precision. The brand can take advantage of the spirit after the New Year by initiating an image of a new start, new beginning and changed behaviors. Thus, the repackaging, and the pre and post-testing of the new design will take place three weeks before New Year. Advertising among business clients will take place in the third week of the repackaging and in the first week of the communication campaign delivered by B2B print media. The developed company website and a new Facebook page will start at the same time but remain active throughout the whole period of the campaign. In order to attract the consumers attention, the first week of the media activities plan will start with TV advertisements. During January, February and the first week of March, the tools used will help create awareness among non-users and regular or inconsistent users. Apart from TV commercials, these tools include online and outdoor media. From week 10 (second week of March) to week 13, print, online, outdoor and TV media will be used to inform people about the competition-taking place in weeks 14 and 15 (middle of April), which is intended to provoke interest among customers. During the competition, online media will remain active as well as sampling, which would create desire among people. Sales promotion will start in the second week of the competition (week 15) and will be used again throughout the whole month of March. Meanwhile, online media will be used after the end of the competition to the end of the campaign in June to inform people about its results. In addition, print and outdoor media is implemented in the end of June in order to prompt customers about the competition and its beneficial outcomes. Successfully, at the end of the campaign a complete AIDA model would be applied. Appendix 9.6 shows a detailed media plan including time frame and Appendix 9.7 shows the budget of the campaign. 5.2.1 Advertising Most marketing communications campaigns rely on advertising as it is an important communication mix tool and is best used for awareness as it is has the potential to reach a large number of target audiences with simple and understandable message content. Hence Ski has given emphasizes to their advertising campaigns with their amounting to  £72,6277; the highest amongst other communication mixes. This includes the production cost of advertisements in the communication mix. Advertising would give Ski an excellent platform to control the message, content, show-case creativity, and give it a competitive advantage to their competition. This would enable the increase of brand / product awareness, associations and encourage the change in consumer perceptions including their involvement with the advertisement. Their prime communication objective is awareness. The emphasis on the strategy for Ski is to introduce better understanding of the yoghurts features. Broadcast Television This broadcast medium has a huge influence over mass coverage and it makes a good platform for skis target segment. Skis budget allocated to the TV commercials would cost  £420,121. The commercials would air during the time slots, 11.00 to 21.30 between weeks 1 to week 13. The chosen channels would be ITV 1(This morning, Early evening news and Movie / drama) and ITV 2 (all-day campaign). Through this time slot allocation, Ski would be able to target mothers during the morning slots and during news and drama slots the message can be sent to families with younger children. ITV would air the commercials to increase awareness of the product between weeks 1 to week 5 at various time slots. In week 12 and 13, the media would air commercials promoting an upcoming sports event for schools. Print media Ski will use print media as a part of their awareness strategy as it has a huge impact on mass audience because of its easy access and availability to mass audiences. The target audience of The Sun would be parents, both working parents and stay-home mothers. The Sun is one of the leading daily newspapers in the UK with a readership of more than 2 million per day (Insight, 2011a). The advertisement in The Sun will appear in 6 issues in week 10 and 11 and the results of the event will feature in 2 issues during the last 2 weeks of the campaign. The Grocer will focus on business to business advertisements to attract the interests of potential clients to promote Skis products in the stores. These advertisements would feature in the magazine during the pre-launch weeks and the first week of the campaign. Additionally, before the Ski holiday competition, retailers will be targeted again through the magazine in order to raise interest in supporting the event and giving it a space in their stores. The approximate cost of advertising in print media would cost Ski  £14,616. Digital media (online) This new form of communication is high in frequency and offers a direct route of advertising to a wider audience; it is faster, easily accessible, flexible and can get instant responses, hence Ski will focus on improving on their web/social media presence. Through websites such as Yahoo!, the advertisements will be start from week 3 to week 17 and on the Good Food (targeting online shoppers who spend time with families and enjoy nutritious food) from week 10 to week 20 (BRAD Insight, 2011d). An online group page for Ski would be created on Facebook as well as advertisements on the site. The group page would focus on the upcoming sporting event and follow all the stages of the event, as well as interacting with existing ski consumers, sharing recipes, comments and feedback. The Facebook adverts will run from week 2 to week 22 and the online group page would commence in week 3 of the pre-launch period until the end of the campaign. The approximate cost of online advertising is  £ 30, 700. ( appendix ). Yahoo! reaches 22 million people in the UK per month; it offers corporate partnerships and provides a unique search and display engine. There are a high number of users using this search engine and it is likely that our target market will come across our adverts, hence the decision to choose Yahoo! for advertising. (BRAD Insight, 2011c). Ski will give importance on building their new interactive website. This would cost  £ 10,600 including half yearly maintenance. The website will include 10 pages and those will include recipes, news / events about ski, a feedback page, image gallery, links to social networking sites, promotional offers and tracking of the entire football event and family Ski holiday competition. Outdoor media In terms of Skis marketing strategy, this form of of media will be a support tool to other mediums such as broadcast and print. It is an effective technique of grabbing the attention of a large audience. Ski will use the 3 main formats of out-door media in order to achieve this. Billboards: To be placed at various central locations. Amounting to  £68,640 in cost. Bus Stops: Posters will be placed in bus stops. Amounting to  £36,000 in cost. Transit: Ads will be placed on buses. Amounting to  £67,600 in cost. The out-door media will run for a period of 8 weeks (from week 5 to week 12). The first 5 weeks will focus on brand and product awareness while the remaining 3 weeks will include details about the sporting event competition. The event result adverts will commence from week 22 to the end of the marketing campaign. Cinema The cinema adverts will run between week 7 and week 10. The cost for 100 screens at 12 cinemas would be  £ 40,000. The advertisements will be mostly run during the screening of movies for children especially when families spend time together. This will focus on the awareness of the football event and the family Ski holiday competition. Packaging Skis new design and packaging (industrial designer charges) will cost approximately  £15,000. The new packaging and design will be completed during the pre launch week before the media plan is implemented. 5.2.2 Sponsorship Sponsorship will be an integral part of Skis marketing communications mix. Through sponsorships new business opportunities emerge such as media coverage, increase of goodwill, increased consumer base and interaction between Ski and the consumer. Skis sponsorship cost is  £6,10,000. Ski will organize a sporting event for schools across England, where in the schools will participate in a football tournament. The winner of the competition will receive sporting equipment sponsored by Ski. The main aim behind holding this event is to promote the health and fitness lifestyle that Ski and Nestlà © stand for. 5.3 Sales promotion Through sales promotions Ski seeks to influence consumer behavior with their interactive promotional strategies. These strategies are especially designed to facilitate consumer interest, interaction and to promote fitness and nutrition. The total cost of Skis sales promotion would amount to approximately  £ 131,055. Vouchers Part of the promotions would include vouchers in Good Housekeeping magazine. The circulation of the magazine is over 400,000 per month (BRAD Insight, 2012). This is a monthly lifestyle issue focused on home and family; hence the rate of vouchers being received by potential consumers is relatively higher since the target market for this is also for mothers. During the sports event, vouchers would be distributed to students and their families to encourage the sales of the product. The vouchers would offer a 20p reduction on the price of any Ski Yoghurt. The total cost of these vouchers would amount to  £ 99,255. Good Housekeeping magazine voucher cost and magazine space amounts to  £ 99,105, whereas school promotional vouchers amount to  £ 150. Sampling Skis sales promotions will include sampling during the school competitions and in supermarkets. The overall cost of the sales promotional activities amounts to  £ 31,800. The sampling event will introduce consumers to a new package design and will focus on building awareness of the yoghurt. 5.4 Public relations A variety of promotional activities will be conducted during the sampling phase in supermarkets and during the sporting event. The main activity would include a life -size cutout with an image of a person skiing and holding a pot of Ski yoghurt and it will be displayed in both school competition finals and supermarkets. A professional photographer will take pictures of people. People need to be creative and imaginative and they can show different ways of using the yoghurt for a snack. Images with captions will then be uploaded on Facebook. Three families of four with the most Likes on their images will win a Ski trip to the French Alps. The Ski holiday will cost approximate  £2,000 each (Adapted from Thompsons, 2012). Twitter will be kept up-to date during the entire campaign. The school football competition videos will be uploaded to You Tube after the event. Post the ski holiday, Videos / images of the families that won the holidays to the Alps will be uploaded to YouTube / Faceb ook. The total cost of a Web administrator will cost  £16,000 per year, which would include maintaining and updating social media accounts like Facebook, Twitter, YouTube (Adapted from PayScale, 2012c). 5.5 Budgeting The media used in the new campaign for Ski includes television, print media, online and outdoor advertising, and improvement of Skis website. Also, sport competition among primary schools, ski holiday competition, sampling during the finals of the competitions and in supermarkets, sales promotion in the form of coupons and repackaging are part of the marketing activities. Furthermore, the costs of pre-testing are calculated on the basis that Ski will need 1 focus group for the testing of the packaging; one focus group testing perceptions; and one focus group testing advertisements. The pre-testing of the awareness will be held by ambassadors in front of 50 central stores in London and Cardiff. The post-testing of the awareness will be the same in the end of the campaign and the post-testing of the perceptions will require one focus group. Additionally, the production cost of the advertisements is estimated as  £30,000 as 5% of the total advertising tools used. The budget of the campaign is estimated at about 5% of the intended market objective to increase sales to  £32 million in six months. During that time the budget should not exceed  £1.6 million. The total amount of the assessed costs is  £  £1,565,467 inclusive of  £50,000 for unexpected costs, especially having in mind that a competition among children can bring many unplanned activities involving extra costs. (Appendices 9.7). 6.0 Evaluation 6.1 Pre-testing To assess how well the new campaign will be received, tests will be carried out upon the prospective advertisements, guiding developers towards advertisements that are conducive to fulfilling the objectives. Five focus groups will used as they can accurately determine the reception of the advert, and therefore inform the creative process. To avoid bias brought in by participants interpretation of their own views, projective techniques will be used. Specifically completion will be used; where partially formed sentences are given to participants, helping to reduce bias and to structure responses in a way that gives responses that are easy to analysed. These should be carried out for all advertisement media developed for the campaign. 6.2 Post-testing Examination of the sales figures before and after the campaign will indicate whether the marketing objectives have been achieved. An examination of data showing any fluctuations in shelf space will of course show whether the desired increase in space has been achieved. Similarly, if all samples of the yoghurt are given out, the target number of people trying a sample will be met with room to spare. Awareness will be measured before and after the campaign to show whether the increase in awareness sought has been achieved. Measurement of this will be carried out with surveys. They will be carried out using opportunity samples outside supermarkets in two city centres within the UK. The locations of central London and Cardiff city centre have been selected as they are within the areas of highest and lowest consumption of yoghurt respectively, giving a more representative sample (Mintel, 2012). Focus groups will be used, separately to those used in pretesting, to show changes brought about in the perceptions of ski. Two groups will be run before the campaign, and two after. Monitoring the campaign and Public Relations Activities Considering the commencement of Skis social media presence in the UK, analysis of feedback from consumers and press will be carried out continuously during the campaign. Thus making it possible to refine and adapt. Using a number of different evaluation methodologies is key giving a holistic insight into the effect the campaign generally (Fill, 2009); and a variety is utilised here, giving a rounded picture whilst showing how the objectives were fulfilled.