Its chief objectives are:
- To achieve compatibility with international voluntary standards on environmental management systems.
- To build mutual trust with consumers, governmental authorities and business partners.
- To ensure continuous improvement of Nestlés environmental performance.
- Conservation of natural resources and minimization of waste.
- Total compliance with the laws.
- To establish the benchmark for good business practice.
- Employing new technologies and processing. By committing to resources, both human and financial.
Measuring the cost and benefits to business of its activities
1.5. Product mix of Nestlé
2. Environment of Nestlé
2.1. Internal business environment
2.1.1 Managers
Nestlé Company is a decentralized organization that organized according to matrix structure. Nestlé Company as a decentralized organization allows its subordinate organizations to enjoy a relatively high-level of autonomy. Although it still makes major strategy decisions at the headquarter level, daily operations are left up to subordinate organizations to derive and implement. The responsibility for operating decisions is pushed down to local units.
Nestlé has a strong top management team which runs on strong values and principles of the company. The efficient top management of the company is able to run finance, operation, marketing, logistics, sales, and research and development departments with great success which ultimately leads to the fulfillment of the goal of the organization.
Senior members are of diverse origins and backgrounds.
The Board of Directors is the ultimate governing body of the Company. It is responsible for the ultimate supervision of the Group. The Board attends to all matters which are not reserved for the Annual General Meeting or another governance body of the Company by law, the Articles of Association or specific regulations issued by the Board of Directors.
The Chairman has the right to represent the organization to implement the company’s rights and obligations, take responsibility to the law and the owners of the organization about the rights and duties are assigned, strategizing development plans of the company and organization those through the decision of the Board.
The Board of Directors delegates to the CEO, with the authorization to sub delegate, the power to manage the Company’s and the Group are business, subject to law, the Articles of Association and the Regulations of the Board of Directors.
The CEO chairs the Executive Board and delegates to its members individually the powers necessary for carrying out their responsibilities, within the limits fixed in the Executive Board’s Regulations.
2.1.2. Employees
The Nestlé team comprises around 328,000 employees, 29% are based in Europe, 33.6% in the Americas and 37.4% in Asia, Oceania and Africa. Their challenge is to combine strategic corporate leadership with strong, responsive local leadership to achieve consistent high levels of performance and corporate responsibility across their business
Nestlé has a rich working culture which motivates its employees to serve best to its customers with the help of the variety present in their product range.
Nestlé has included the benefits of the employees in the goal statement of the organization as the management of the company strongly believe that the productivity, quality and the dependability will reflect on the product only if the employees take care of all these factors.
Different departments of the company work to contribute in the growth of the organization and these departments not only keep the customer's needs and demand in mind but also keep the same type of attention for the internal customers of Nestlé.
The company believes if the internal market of the company is fully satisfied, the internal market will be able to serve to its customers and able to understand their needs and able to manufacture the products which can fulfill these needs
2.2. External environment
2.2.1. Customers
The immediate customers of Nestlé 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 Nestlé are the consumers who consume its wide range of product. The company has a bright brand image in its big pool of end customers.
Nestlé has an extensive marketing network to figure out the target customers, it has marketing specialist to understand the market place and the customer needs, secondly to is spending a lot to figure out the customer’s preferences regarding the substitutes of its products in order to bring the customers on board and retain them.
Nestlé has an extensive market share, due to the reason that its customers are brand loyal and do not compromise over quality and same is the case with the company’s quality assurance (QA) team.
One of the principle strategies that Nestlé utilizes is to produce differentiated products for each age group in order to get a high market share and preferences over others.
2.2.2. Suppliers
Suppliers provide the resources like labor and material resources to produce goods and services. They add to customer overall value delivery system.
Labor supplies include handling of
- Quantity of labor
- Quality of labor
- Labor strikes
- Labor relations
Material supplies deals with the
- Quantity of material
- Quality of material
- Price of material
- Stability of material inputs
- Delivery delays
Nestlé efficiently handles the quality, quantity, price and stability of both material and labor supplies. Management maps out the strategies for labor strikes, supply shortages and delays to avoid increasing the cost of production, which can badly affect sales in short run and customer satisfaction in long run.
2.2.3. Competitors
Competitors also play a vital role in effecting the way in which the organization operates, competitors are basically the rival firms in the same market which is providing the same product in the case of Nestlé the are many competitors since there is a wide range of products offered by Nestlé
Nestlé's largest international competitors are , and . It also faces competition in local markets or specific product ranges from numerous companies, including and
Nescafe is one of the world-famous brands of Nestlé with a long history of development and illustrious reputation. Therefore we choose this brand to go deeper analysis of its production as well as its distribution.
3. Input and output
3.1. Inputs
3.1.1. Raw material
Coffee beans and water are the basic ingredients used to make coffee, but there are as many ways to make coffee as there are coffee drinkers.
All Nescafe coffees are made of 100% pure coffee beans. The only exceptions are our ready-made coffee mixes and mixtures. They contain other ingredients such as whitener and sugar, which are commonly added to coffee.
Raw materials are selected from the freshest coffee beans through the production process with the highest quality standards, properly roasted to keep the aroma of coffee are naturally charming
3.1.2. Labor
Teams of professional preparation and testing are well trained. The sensitive senses of coffee experts allow them to recognize the best qualities as grinding, roasting and tasting raw materials.
3.1.3. Technology
The company also has modern production technology and strictly quality control system in all stages of production.
3.2. Outputs
3.2.1. Nescafe’s products
Nescafe products include: Nescafe Original, Nescafe Classic, Nescafe Clasico, Nescafe Gold Blend, Nescafe Black Gold, Nescafe Spécial Filtre (in France), Café Parisien (The Paris experience), Nescafe Allen, Nescafe Espresso, Nescafe Red Cup, Nescafe Blend… to name just a few.
3.2.2. Distribution
Nescafe also be distributed under Nestlé’s distribution system with the 2 major channels of distribution: Traditional distribution channels and Modern distribution channels.
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Traditional distribution channels (grocery): Organize the sales staff to distribute products to individual households through market channels & shop.
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Modern distribution channels (key account): Deliver goods to consumers through supermarket, metro or distribution chain system.
Furthermore Nestlé is currently holding Out Of Home (OOH) distribution channel such as restaurants, hotels, at-work, factories, etc… There are specific products for this channel to cater fully for the professional chef, a full merchandise to cater to the world standard hotel as 5 star hotels or the high-rate corporate office ... called NESTLÉ PROFESSIONAL parts distribution.
3.3. Research for production of Nescafe-Nestlé in Vietnam
To ensure a large output power, the company must be combined with the Vietnamese government to build long-term plan for raw materials to ensure the production of the company. Build strategic Materials areas by combining with fertilizer companies and agricultural extension centers to sign a contract directly with farmers. Furthermore, collaborate with scientists and local authorities in the provinces of Dak Lak, Lam Dong and Dong Nai-the key coffee growing regions in Vietnam- to build the model farm, offering new varieties of high yield and send some Vietnamese scientists to some Center of research and development in developing countries.
Regarding technology, the big companies like Nestlé will find advanced technology in the world to ensure that few workers record the highest results. Moreover, the company will provide technical assistance to coffee growers so that they can provide better quality and have higher income
About labor at the factory the company will cooperate with Vietnamese Ministry of Labor to learn about the workforce in Vietnam or the company will cooperate with the local center for workers promotion or the surrounding areas to make sure human resources are available if the company needs. The company will have a separate department to do this.
4. Manufacturing process
It all starts on the plantations, where farmers tend to the coffee plants and harvest the coffee cherries, usually by hand. The next thing they have to do is separate the bean from the outer shell of the cherry. This is done either by drying the beans in the sun or by washing them in a pulping machine before drying them.
To get at the coffee beans inside each cherry, the beans need to be separated from the skin, pulpa and parchment. This is achieved by drying the cherries under the sun or by soaking the cherries in hot water.
The dry beans have a greenish tinge and are therefore known as 'green beans'. They are usually exported for blending and roasting.
By combining different types of beans you can give the resulting coffee a more rounded taste.
Once you have the right blend of beans, the most important phase of coffee production begins: the roasting
Once the green coffee beans have been selected, the beans need to be roasted to release the aroma and taste we know as coffee.
In fact, this important process is one of the most fundamental parts in producing the flavorful taste and rich aroma of NESCAFÉ coffees.
During roasting, the coffee beans expand and change in color. They turn to yellow once they absorb heat and then to brown as the beans lose their water content. The beans turn darker as they release their oils, giving the coffee its flavor.
Depending on the roasting equipment and the desired flavor of the coffee, green beans are roasted at between 180°C and 240°C for between three and fifteen minutes.
After roasting, the beans are ready for grinding. The particle size of the grind; whether coarse or medium, fine or very fine depends on the brewing method and equipment used.
Grinding increases the surface area of the coffee, allowing the flavor to be extracted more easily.
To make NESCAFÉ® Pure Soluble Coffee, the ground coffee is put into an industrial percolator containing hot water under pressure to brew a highly concentrated liquid coffee, called coffee liquor.
The coffee liquor is then spray dried by passing it through a continuous stream of hot air, changing it into fine particles. This is the process for making NESCAFÉ CLASSIC® coffee.
Alternatively, the coffee liquor is snap frozen and then ground into the required particle size. The particles are suspended in a vacuum tunnel with low heat, causing ice crystals to form and leaving particles of freeze-dried NESCAFÉ GOLD® coffee.
5. Marketing strategy for Nescafe in Vietnam
5.1. Price
Launch several product lines aimed at the large and diverse segment of the market. Each segment has different product lines with reasonable price and can be accepted but still ensure high quality.
- For classes of consumers with high incomes and interested in quality: the Nescafe Gold, Premium with higher prices and higher quality compared to other common products
- For classes of consumers with average incomes - a large segment: with Blend 43, Mild Roast, Espresso products ... consumers receive economic benefits as well as product quality.
- For young people: new product such as Latte with the relative prices.
Deploy promotions, discounts to attract customers and increase purchasing power
5.2. Place
Build strong distribution network with distributors and retailers to cover the market with high density. Develop the retail system to ensure the company's products are available to serve customers: retail outlets at premier sites e.g. Bus stand, Railway station… Implement incentive policy about pricing and commission to agents to encourage them to introduce and offer products to customers at the reasonable price.
Other than that, Nestlé can put their vending machine in a place that always full of people such as shopping mall, airport, hospital, school and any other place.
Associate with supermarkets and shopping centers by opening sophisticated parlors with more value added services; improve the area, type and number of the company’s products here.
Expand promoting trade into neighboring countries such as Laos, Cambodia, west Asia countries, where Nestlé’s products are not available or do not meet the requirements.
5.3. Promotion
Take advantages of company such as brand reputation, quality products to increase market share
Use mass media to advertise products to consumers:
- TV commercial
- Magazine and newspaper advertizing
- Public event
- Online advertizing
- Social networking
Use other form of advertising such as non-media communication or advertising. Some of the ways are participating exhibitions, sponsorship activities, public relations and sales promotion such as giving freebies with good or reduced price
Construct showrooms to introduce the company’s products and distribute sample products to the customers.
Intensify customer care service by holding seminars about nutrition and healthiness, informing customer about Nestlé’s products.
References
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Jafaa, M.S. (2009) Nestlé Marketing strategy for Marketing Report - Nestlé Milo [online]. Publication 25 November 2009 [accessed 16 June 2012]. Available from:
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Brabeck, P. (2011) Nestlé Malaysia Marketing Strategy [online]. Publication 8 March 2011 [accessed 16 June 2012]. Available from:
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Aziz, M.K. (2009) Marketing Management Strategies of Nestlé [online]. Publication 20 May 2009 [accessed 18 June 2012]. Available from:
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Nescafe (2008) Coffee Production [online]. Publication 18 December 2008 [accessed 19 June 2012]. Available from:
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Khan, S.A. (2011) TQM 2nd Assignment on Nestlé [online]. Publication 16 February 2011 [accessed 21 June 2012]. Available from:
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Nestlé (no date) Mission and Vision [online]. Vavey, Switzerland: Nestlé [accessed 21 June 2012]. Available from:
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Nescafe (no date) Coffee Roasting [online]. Vavey, Switzerland: Nestlé [accessed 21 June 2012]. Available from:
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Nescafe (no date) Coffee Ingredients [online]. Vavey, Switzerland: Nestlé [accessed 21 June 2012]. Available from:
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Nestlé (2011) Nescafe [online].United Kingdom: Nestlé UK [accessed 21 June 2012]. Available from:
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Appendices
by
mittran93 (student)
