marketing

Table of Contents I.

INTRODUCTION ................................................................................................................... 2 1.1.

Definitions of marketing .................................................................................................. 2

1.2.

Marketing oriented organization ...................................................................................... 3

1.3.

Marketing concept ............................................................................................................ 3

1.4.

The benefits and costs of using marketing approach to doing business in Vietnam ........ 4

II. DETAIL ................................................................................................................................... 6 2.1.

Macro and micro environmental factors .......................................................................... 6

2.2.

Segmentation and targeting strategies ............................................................................ 12

2.3.

Buyer behaviors.............................................................................................................. 13

III.

CONCLUTION.................................................................................................................. 14

References ..................................................................................................................................... 15

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I. 1.1.

INTRODUCTION Definitions of marketing

Marketing is a complex issue that combines both the philosophy of business and its’ practice. Marketing is about meeting the needs of customers. It is about understanding customers and finding ways to supply products or services which meet the customers’ demands. Firstly, “Marketing is the management of exchange relationships.” Marketing is the contract between the organization and the outside environment especially any activity relating to

customer. The customer can attach to the company or any products and services of the company by marketing. For example, the customer can know about new product of Nestle by advertisement clip on television. Secondly, “Marketing is the management process which identifies, anticipates and supplies customer requirements efficiently and profitably”. The definition focuses on marketing management process. This definition is considered the heart of customer marketing. Besides marketing means finding out how to make a product and service to customers at the right price, right time and right place. Companies must understand the markets they intend to sell products to their marketing strategies accordingly. Without consistent marketing, the product will not attract customers, and the company will not be profitable. Next, “Marketing is concerned with meeting business objectives by providing customer satisfactions.” Following this definition, the company is not just selling products but also pay attention to the benefits and needs of customers. Customers play an important role in marketing. So to meet the benefits of customers is to meet the benefits of the company. Because when customers feel satisfy about the product, they will continue buying and using products. Finally, “Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational goals.” It means that marketing includes the long-term specific actions before production to after sales. The first is the planning process before production, introduction and selling products. Next is the price process, whether the price is suitable for market. Promotion activities enable the company to entice and attract the attention of customers.

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Finally, the distribution activities which company to choose appropriate target market to help the company getting profitably.

1.2.

Marketing oriented organization

Marketing Oriented Organization means a business reacts to what customers want. The decisions taken are based around information about customers’ needs and wants, rather than what the business thinks is right for the customer. Nowadays, marketing orientation becomes a popular

orientation of many companies and it can be used for Nestle too. There are many characteristics of a marketing orientation organization that will shoot the company. Firstly, because of researching what customers need and want and also have specific plans so their products tailored to the need and want of the customer. Furthermore, in a competitive environment marketing orientation will help the organization leading ahead because they fit the customer's satisfaction and create a long-term relationship with customers. On the other hand, while competing with other companies there are many opportunities for a research thrust. Research more will bring to your company more advantages in the market. Secondly, knowing your customers will give you more chances to have a good relationship with customers. Which basically means you will be enabled to communicate more efficiently with cost-effective marketing communications. One more advantage of using marketing orientation is you produce what you can sell rather than sell what you can produce like in sales orientation. Finally marketing orientation helps you build a long-term relationship with customers and your customers will be highly satisfied. Marketing orientation is the best orientation for Nestle Chuckie marketing method.

1.3.

Marketing concept

The marketing concept is a philosophy. It based on four main pillars are the target market, customer trends, coordinate marketing and profitability. Marketing philosophy asserts that the key to achieving the objectives of the organization lies in identifying needs and wants of target markets, and deliver a satisfaction and performance results better than the competitors.

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These are the three key concepts of marketing including needs, wants and demands, and they are differentiated as follows. Needs are the basic human requirements; people need food, air, water, clothing, and shelter to survive, education, and entertainment. These needs become wants when they are directed to specific objects that might satisfy the need, though these wants in themselves are not essential for living. Someone will need food but may want a hamburger, fries and a soft drink, but someone else will also need food in just the same manner but will also want a mango, rice, lentils and beans. Wants are therefore shaped by one's society and surroundings. The third concept, demands, are wants for specific products backed by an ability to pay. Many people want a luxury car or a weekend break in the Caribbean, but only a few people are willing and able to buy one. In business terms, companies must measure not only how many people want their product but also how many would actually be willing and able to buy it. In marketing there are five kinds of needs: Stated, real, unstated, delight and secret. Marketers have played on the secret needs in recent years as this is the sort which makes the customer be seen as savvy and a great consumer, and have adopted all sorts of tricks to skew demand, since there has been more disposable income in the modern age and shopping has become a prime leisure activity. In some ways there is a chain here; more education means more awareness of the wants and more money

to spend on a demand, so in a good and just society there is a large number of people who push for the demand of a certain product, and this has given rise to very successful companies who must make brand awareness and corporate social responsibility key facets of their engagement with the public, otherwise known as ‘the customer’.

1.4. The benefits and costs of using marketing approach to doing business in Vietnam

Marketing nowadays becomes a very important part of many companies in every different industry. However we know that nothing can be perfect so marketing too. It has some advantages and disadvantages which are the benefits and costs for your company. Especially when doing business in Vietnam to have a good marketing strategy will bring you a lot of benefits and cost a lot too. Successful organizations realize that companies wanting to exist and do business profitably by providing customers with the right product, in the right time, at the right place with a good promotion is very importance

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Benefits: Goals of marketing is to stimulate customer, maximize consumer by meeting customers’ needs and make them feel pleased with products , after-sales services and following benefits of company . Furthermore, customer satisfaction is basis for purchasing again; buy more the same item or more expensive items and setting up trust, loyalty for the brand name and the producer. According to all this benefits, Nestle Vietnam always attach special importance to customer health by producing quality products. Nutrition, Health and Wellness is Nestlé’s strategic

direction. Through the process of innovation and product improvement, Nestlé launched the products are not only tasty but also offers nutritional solutions suitable for all ages, all people. As a result, customer will feel being cared. They also feel safe when using quality products. It creates the trust and loyalty of customer for the company. Costs: The company should have a budget to maintain a certain amount of customers or campaign for launching new products or forms of promotion, personal selling that not only spend a lot of money but also waste time. Costs maybe involve some or all of following: advertising, and personal selling. At first, advertising is a form of communication which is paid to perform. Additional advertising aimed at persuading or influencing impact on buyers. Advertising messages can be sent to customers in many different media such as newspapers and magazines, radio, television, internet … to introduce a new product, convince customers to buy a new one and gain high profit. Nowadays, people use to searching for information on the internet, it is a good chance for marketing to get closer with their potential customers and also get feedback from consumers. On the other hand, the cost of using marketing approach is high. Companies have to spend a lot of money for advertising. Personal selling is oral communication with potential buyers of a product with the intention of making a sale. The personal selling may focus initially on developing a relationship with the potential buyer, but will always ultimately end with an attempt to "close the sale”. The main disadvantage of personal selling is the cost of employing a sales force. Sales people are expensive.

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II.

DETAIL

2.1.

Macro and micro environmental factors

An organization must understand its environment if it is to exploit changing market conditions and target its market successfully, the essence of a successful marketing strategy. Therefore the organization like Nestle has to understand its micro and macro environment. 2.1.1. Micro environmental Micro environmental factors are internal factors close to a business that have a direct impact on its strategy. These factors include: Customers Organizations survive on the basis of meeting “customer needs and wants” and providing benefits for their customers. Failure to do so will result in a failed business strategy. The immediate customers of Nestle are retail and grocery stores which provide the products of the company to the end customers at a reasonable price and a reasonable profit. The end customers of Nestle are the consumers who consume its wide range of product. The company has a bright brand image in its big pool of end customers. Employees Employing the correct staff and keeping staff motivated is an essential part of an organization’s strategic planning process. Training and development play a critical role in achieving a competitive edge; especially in service sector marketing. This is clearly apparent in the airline industry, where customer services are crucial in obtaining a competitive edge. Suppliers Suppliers provide the raw material resources, unfinished goods and labors to the company in order to produce goods and services. The effectiveness of suppliers determines the efficiency of the company in terms of producing the goods. In addition to that the quality of the finished 6

product has a strong with the suppliers of the firm especially in case of food products. As the presence of the company is in more than hundred companies, it is a challenge for the company to maintain its standard all over the world and provide the consistency to its customers in the taste and quality of the product. Further, in Vietnam, in order to invest a new product like Nestle Chuckie, Nestle have to focus on finding suppliers. We can divide the supplier of Nestle into two parts: Labor suppliers and material suppliers. Labor suppliers deal with the quantity of labor is required at the optimum

level in order to prevent the loss of labor force and prevent the company from the shortage of labor which again can lead building of inventory as a cost for the company. The skills of labor is again maintained by the labor suppliers, wherein the labors of different skills are managed in such a way that the operation of the firm can run smoothly. Material supplies handle all the material required by the firm in order to manufacture the finished product for sale. Nestle is in the food and quality markets and the quality of such item plays an major role in its success in the market. Shareholders As organizations require inward investment to grow, they may decide to move from private to public ownership and list on the stock market. The introduction of public shareholders brings new pressures as public shareholders want a return from the money they have invested in the company. Shareholder pressure to increase profits will affect organizational strategy. Relationships with shareholders need to be managed carefully as rapid short term increases in profit could detrimentally affect the long term success of the business. Marketing intermediaries The market intermediaries of the company help to advertize, sell and distribute its product to the end customers. The physical distribution network of the company decides the medium by which the finished product is delivered to the end customer on time and with safety. This department also ensures the proper storage of the firm that prevents the product from getting any king of damage. 7

The marketing service department of the firm helps in the promotion of the product and acts as a communication channel between the company and customers. It not only communicates the features of the product to its customers but also get the feedback with the help of survey, which helps the research and development department to develop a product according to the need of the customers. The other intermediaries of the company like banks help to provide the funds to the companies and play an important role in the continuity of the business. Insurance companies insure the property and the goods of the company against the risk involved in various operations, buying and selling of the product. Nestle should create a working in a smooth coordination with all its marketing intermediaries which helps in providing the best and pure food products to its valuable customers. Competitors Competitor analysis and monitoring is crucial if an organization is to maintain or improve its position within the market. If a business is unaware of its competitor's activities they will find it very difficult to “beat” them. The market can move very quickly whether that is a change in trading conditions, consumer behavior or technological developments. As a business it is important to examine competitors' responses to these changes so that you can maximize the impact of your response. Because Chuckie Nestle is new product in Vietnam so the company should determine the competitors in Vietnam market. There are many chocolate drink product in Vietnam market, However, somechocolate drink products of Dutch Lady and Vinamilk which are popular in Vietnam can be strong conpertitors of Nestle.

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2.1.2. Macro Environment The macro marketing environment takes into account all factors that can influence an organization, but are outside of their control. There are four major macro marketing environment forces to deal with (PEST): Political Environment government of Vietnam has never imposed any political pressure in fact they have always supported foreign investment and foreign businesses to grow in Vietnam. As the company is into food and nutrition business they have to just adhere to the laws of food and nutrition policies of government and constantly provide good quality which is the vision and mission of the company thus Nestle never faces any problems on political front. For example, Vietnam joined WTO in 2006 therefore the importation tax decrease. This is benefit for Nestle because it is a foreign company. Economical Environment

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Economical Environment consists of all factors-such as salary levels, credit trends and pricing patterns that affect consumer spending habits and purchasing power. Firstly, The GDP trend of Vietnam is increasing strongly. Therefore the purchasing demand also increases. This thing created opportunities for Nestle to attach the customer when investing to Vietnam. In addition, the inflation and deflation of the country are very important. When the percentage of inflation is high, it means that the price and the cost are very high but the salary is staying the same. The inflation rate of Vietnam in 2008 increase to more than 23%, it means that the price in the market also increased. As a result, people limited their purchasing. It made difficult for many businesses

in Vietnam. However, now, the inflation rate decreased to about 15 %. Social – Cultural Environment Vietnam culture is no doubt of having light food at constant intervals and young crowd of Vietnam likes to have good nutritional food thus Nestle has great scope there.

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Technological Environment Nowadays we are working in an Information Technology world so technology is the most important thing to the organization. It has affects in every parts of the company. In consumer markets, there are many different types of modern products such as laptop, personal computers, etc. The things which are produced are not the same not only the hand-made or food but they also use a new technology to produce a new product. Otherwise, the manufacture of products has changed. Nowadays workers do not have to do all the works because the robot will do that. It

also explains why the quality of the products is increasing. Furthermore many people around the world can use internet so it is a good chance to advertise your product and customers can buy whenever they want just with a click. So the availability and the delivery have improved. In case of Nestle and the product offered by the company these factors do not create much impact in general scenario. However as we have seen the major events like World War had created a positive impact on the sale of confectionary products of the company. The culture has some impact in this company as whether the country has most people as vegetarian or nonvegetarian the consumption of milk products is always there. However the countries where the people are more dependent on milk products are profitable market for Nestle.

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2.2.

Segmentation and targeting strategies

Market segment consists of a large identifiable group within a market with similar wants, purchasing power, geographical location, buying attitudes, or buying habits. In a total market, there is always some diversity among the buyers. Within same general market there are group of customers, market segments, with different wants, buying preferences, product use behavior. In some markets these differences are relatively minor, and a single marketing mix can satisfy benefits sought by the consumer. The market segment is based on need based and it’s targeted for every one who cares for his/her life and wants to maintain good health. After the company has segmented a market, management must next select one or more segments as its target markets. The company can select any one of the tree strategies i.e. Market Aggregation, single segment concentration, or multiple segment targeting. The target market consists of upper lower class to upper upper class due to their purchasing power and company is

following multiple targeting strategy which includes mainly group - children consumption especially for chocolate drink For Nestle Chuckie, the target market that Nestle defined for Chuckie is children. Firstly, Chuckie chocolate drink is one that most children interested in. Next, the packaging of the product has been designed with animated vignettes of the colorful and lovely thing that always attracted the attention of children. Another important factor is that Chuckie is produced to meet the increasing health of children, helping them developing a better way. Chuckie provided higher nutrient content, which is good for the health of children. For example, calcium-N content makes better bone health, make children more developed. These nutrients are provided in Chuckie is based on RENI standard, which measures dietary standards I nutrients and not foods or diets. Backed up by the best possible product quality and food safety standards, Nestlé promotes consumer health and well-being while at the same time adhering to regional traditions with regard to taste and pleasure.

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With the objective of ensuring optimal nutrition, Nestle takes into account the consumer’s increasing expectations with regard to food, but it also makes a contribution to good health and illness prevention that extends above and beyond the traditional concerns of sustenance, pleasure and convenience. In line with Nestlé’s global philosophy, Nestlé Pakistan is proud of its commitment to excellence in product safety and quality and to providing value and services to its consumers. Nestlé Pakistan operates in many ways but people, products and brands are the main flag bearers of the

Company’s image. Nestlé motivates the children to drink Chuckie by telling their parents about the importance of nutrient in the product which totally good for their children’s health and development.

2.3.

Buyer behaviors

In marketing, customers is an important factor determining the success of the product. So every company has always focused on customer needs, especially buying behavior of consumers. Firstly, basing on the basic human requirements such as people need food, air, water, clothing, and shelter to survive, education, and entertainment, people recognize what they want to buy. When the customer wants to drink a chocolate drink, he will buy a chocolate drink. Thus, before buying a drink he will find out which product is suitable to him. He can find information of many products on TV, internet, newspaper or from his family, friends. After finding, he will have some product to choose such as Chuckie, Milo or Ovaltine. And he will compare these products to find out the best for him. Therefore, in order to have advantages in this competition,

Chuckie has to give authentication and impression information in the advertisement which put the benefits of clients on top to meet the needs of customers. Providing a full range of nutrients beneficial to health, especially nutritional components in the product being higher than other products on the market is an important advantage for Nestle Chuckie. Next, the customer will accept the best product which he evaluated. He will find the place to buy the product. If there are no stores selling the product, the company will lose customers. And the customer will buy the product. The company should create ways which help customer easily to find the product, e.g. 13

display the products at easy available place in supermarkets or retail stores. Finally, after using the product, the customer will decide if he should buy the product again. Therefore, the company needs to provide good products. Besides, the company also should give member card or discount card to potential customer to keep the relationship to them.

III.

CONCLUTION

This is competitive world and must never forget that customers have a choice. If they are not satisfied with a Chuckie, they will switch to another brand. The pursuit of highest quality at any price is no guarantee for success, nor is a single-minded cost-cutting approach. Lasting competitive advantage is gained from a balanced search for optimal value to customers, by simultaneous improvement of quality and reduction cost. Success can never be taken for granted. Nestlé must watch and learn from its competitors. If they do something better, Nestle must improve its own performance. Nestle can achieve competitive advantage through quality. Progress is followed by listening to Nestle customers and by measuring its works performance.

Shortcomings and mistakes must be analyzed and corrected. Problems must be anticipated and prevented before they occur. Nestle also must identify and take advantage of opportunities. To stand still is to fall behind. So Nestle must strive for continuous improvement in every area. It is through many small improvements as well as through major breakthroughs that Nestle will achieve excellence.

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References 

British Library Cataloguing (2004). Marketing Supporting Foundation Degrees. London: BPP Professional Education. P7 – 8

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British Library Cataloguing (2004). Marketing Supporting Foundation Degrees. London: BPP Professional Education. P88 – 89

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British Library Cataloguing (2004). Marketing Supporting Foundation Degrees. London: BPP Professional Education. P126 – 128

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Nestle. (2005). Nutrition, Health & Wellness. Available: http://www.nestle.com/NHW/Pages/NHW.aspx. Last accessed 2nd April 2012.

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Nestle. (2005). Nestle Chuckie. Available: http://www.nestle.com.ph/chuckie/static/dearmom_home.htm. Last accessed 2nd April 2012.

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