The Goodbye Post

The time has come sooner than I anticipated and now I have to part with this blog. It has been a heartening experience to write about a product with very little information available on the internet (or otherwise). It is even more heartening to see my blog pop up on Google search engine every time I type Nestle Slim Milk.

At the risk of sounding creepier with every word I type, I say, “Farewell, Marketing Diary! You will always be cherished!”

With lots of love and healthy calorie-free milk,

Surabhi Udas

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Nestle Slim Milk: Holistic and Sustainable Marketing

Holistic Marketing- The all encompassing promoting idea is focused around the advancement and outline of the advertising program, techniques and exercises that perceives the expansiveness and between conditions. It endeavors to create and keep up different points of view on the organization’s business exercises. “Everything matters,” is the motto. This boils down to the fact that one must take into consideration every external factor which affects or is affected by the business.

holistic-marketing-concept

The above mentioned components of Holistic marketing are as follows:

Internal marketing- It is important to establish secure and informative internal communication for the benefit of both employers and employees.

Integrated marketing- The integration of product, place and promotion of the marketing plan to touch all aspects of marketing.  The product offering has to be communicated to the customer using appropriate promotional methods and it has to be made easily available too. Nestle Slim Milk is available across all major departmental stores in Tier one cities and is promoted as a healthy calorie-free milk for health conscious audience.

Relationship marketing-  This is possibly the most important element of holistic marketing. It is important to maintain cordial and mutually beneficial relations with the suppliers, distributors and of course customers to ensure long term effective partnership.

Socially responsible marketing- A firm needs to fulfill its responsibilities towards the society. Only having a profit making approach with no consideration for the environment will result in bad word of mouth, loss of reputation, loss of customers in to future, imposing penalties and loss of license to continue the business.

Sustainable Marketing

Sustainable Marketing is an integral part of any company’s working policy. In the regard, Nestle is at its prime when it comes to maintaining environmental sustainability with their program. Their program called “Creating Shared Value” works hard to create a better environment for all entities around the organization.

In their own words, “Creating Shared Value begins with the understanding that for our business to prosper over the long term, the communities we serve must also prosper. It explains how businesses can create competitive advantage, which in turn will deliver better returns for shareholders, through actions that substantially address a social or environmental challenge. As a company, we are best positioned to create shared value in three areas: nutrition, water and rural development.”

Let us look at an element of sustainable development utilized by Nestle Slim Milk as their way of contributing to the environment.

Packaging

Nestle promises to expand the scope of their packaging ecodesign by moving from PIQET, a tool that optimizes the environmental performance of our packaging, to a broader, more holistic approach that covers the entire value chain, called Ecodesign for Sustainable Product Development and Introduction (EcodEX).

Progress

In 2013, 66 594 tonnes of packaging material were saved, which is equivalent to CHF 158.5 million (2012: 47 125 tonnes). We also evaluated 5200 projects and more than 15 500 scenarios (2012: 4000 projects and 13 000 scenarios).

Nestle belives that the packaging of products is crucial to prevent food waste, guarantee our high quality standards and inform our consumers. Their challenge is to achieve both performance and functionality during the design process, whilst optimizing the weight and volume.

In 2013, 12% of Nestlé factories achieved zero waste for disposal – ahead of the targeted 10% by 2015.

Nestle as the parent company is working hard towards achieving environmental sustainability and it reflects clearly in the environmental packaging of Nestle Slim Milk.

Consumer Behavior

Consumer behavior is basically a study to find out how an individual, group or an organization select, buy, use any product or services and what are the factors which influence their decision. This analysis is critical to the survival of a product. 

With the variety available in the market, consumer behavior is a volatile business and has to be constantly monitored. However, there are various factors which have a definite impact on the consumer behavior, leading up to the purchase of the product.

These factor Include:

Market Stimuli – Includes product, service, price, distribution and communications. .

Other Stimuli – Includes economic, technological, political, cultural factors.

Consumer Psychology – Includes motivation, perception, learning, memory

Consumer characteristics – Includes cultural, social and personal

Buying decision process – Includes problem recognition, information search, alternatives evaluation, purchase decision and post purchase behavior

 Purchase Decision – Includes brand choice, product choice, dealer choice, purchase amount and purchase timing

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Nestle Slim Milk: Analyzing Business Markets

“Organization buying is the decision-making process by which formal organizations establish the need for purchased products and services and identify, evaluate, and choose among alternative brands and suppliers.”

It is basically the decisions made during B2B transactions so as to maximize profits. Buyer behavior among B2B companies today is complex. Marketers tend to talk about “the B2B buyer” as an individual task with making decisions on behalf of the organization, but the buyer is often a group of people with different perspectives and requirements. Steps involved in organizational buying are as follows:

organization-buying

To understand this concept better, it is also important to evaluate what basic differences there are between individual and organizational buying. They are as follows:

consumer bs organization buying

Nestle Slim Milk: Segmentation, Targeting and Positioning

Segmentation

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Demographic Segmentation: 

In demographic segmentation, the market is divided into groups on the basis of variables such as age, gender, income, occupation etc; these demographic variables are so popular with marketers so that they are often associated with the consumer’s needs and wants. Segmentation variables are easily measurable. Here are the demographic variables have been used to segment markets.  Nestle Slim Milk categorizes its target on the following criteria.

– Age

20 to 40 years – they account for the major share of the customer base as they are young urban working professionals with limited time and a desire to lead a healthy lifestyle.

Middle age and elderly –The ready-to-use tetra pack content of healthy milk is very convenient for the elderly although frankly, this isn’t the target market Nestle aims to conquer.

– Gender: Nestle Slim Milk is a gender neutral drink positioned for anyone who wishes to be healthy.  

– Income: Nestle is associated with a certain luxury with their brand name and hence caters to a segment that is ‘well off’ in terms of income. Eg; IT Professionals in India

– Occupation: Students, working professionals, sports enthusiasts, athletes, health enthusiasts

Psychographic Segmentation:

Psychographic segmentation buyers are divided on following ways:

  • Lifestyle:Business class, working class executives, students
  • Personality:hardworking, health conscious.
  • Occasions:
  • Benefits:Quality, health
  • User status:regular user
  • Usage rate:regular
  • Loyalty status:regular Loyal
  • Readiness stage:intending to buy
  • Attitude toward product:enthusiastic, grateful

Geographic Segmentation:

Geographic segmentation is done using the spatial location to segment the market. In geographic segmentation there are different schemes for the different geographical units such as states, regions, cities. Markets are mainly divided into the rural and urban areas. The Geographical variables have been used to segment markets in following ways:

  • Area:Nestle Slim Milk limits itself to semi urban and urban India as that is their major consumer base
  • City:Class-A and Class-B cities i.e. metro politician cities
  • Region:Distribution is constant across urban areas

Socioeconomic Classification:

The people belong to the high job profile with efficient communication knowledge can use it. The purchase potential of this product is limited up to the B1, B2, A1 and A2.

TARGETING

In geographic segment they target cities with a rampant IT culture.

In demographic segment their main target is young working professionals (20 to 40 years).

In psychographic segmentation they targeted a2, b1 and b2 socio-economic classes.

In behavioral segmentation it was found that they were targeting the first time users and also their regular users. They target grocers, departmental stores and hyper markets.

POSITIONING

Positioning
Nestle Slim Milk Amul (established brand in India)
Point Of Difference Higher price (Rs.80) Lower price (Rs.45)
Point Of Parity Category POP- Both are calorie free milk

Competitive POP- Amul is cheaper and a trusted brand in India with a large history.

Nestle is a luxury good and available in selected outlets.

Nestle Slim Milk: Brand

Branding

According to AMA “A brand is a customer experience represented by a collection of images and ideas; often, it refers to a symbol such as a name, logo, slogan, and design scheme, brand recognition and other reactions are created by the accumulation of experiences with the specific product or service, both directly relation to its use and through the influence of advertising, design, and media commentary.”

“A brand often includes an explicit logo, fonts, color schemes, symbols, sounds which may be developed to represent implicit values, ideas, and even personality.”

Nestle is a global brand with a huge beverage segment

Brand Equity: It is the added value endowed on products. It is reflected in the way consumers think, feel and act with respect to the brand, as well as in the prices, marker share and profitability the brand commands for the firm.

Brand Promise: Is the marketer’s vision of what brand must be and do for its consumers. What benefit it is going to give to the customer so that they feel associated with the brand. In case of Nestle Slim Milk, the brand promise is to provide healthy, calorie free milk which is easy to consume.

There are three major elements which a Brand should convey:

Brand Awareness: In the case of Nestle Slim Milk, it is necessary to convey existing and prospective customers of its existence as the best selling and most effective slim milk. Therefore Nestle came up with many advertisements targeted at young working professionals.

Brand Attitude: A brand should follow the attitude of a problem solver or problem avoider. It has been observed that every time a problem has arisen, Nestle has responded positively to sort it out.

Brand Purchase Intention: Nestle Slim Milk has an effective marketing policy that attracts new and keeps existing customers. For this they offer some things that are superior to any of the competitors, which are as follows:

  • Brand Nestle
  • Quality
  • Positioned as a premium product
  • Easily available
  • Calorie-free promise

Nestle Slim Milk: Integrated Marketing Communications

True to its “Good Food. Good Life.” tagline, Nestle constantly reinforces the importance of healthy living in each of its promotional campaigns. The range of milk products offered by the company are classified under a string of promotional activities titled, “The Goodness of Milk.” The concept discusses how milk is an answer to a multitude of problems faced by the human body. Nestle Slim Milk is also promoted under the “Goodness of Milk” on the Nestle website.

Promotion is a heady mix of the four Ps; a volatile process which determines the reception of the product in the market. For every brand, one of the major issues is that of sustaining its market share.  To attract more customers, retain the existing customer base and to increase their market share, companies adopt various promotion techniques which help in generating revenue. For this purpose there are 8 major modes of communication in marketing communication mix:

 

Advertising

Sales Promotion

Events and experiences

Public relations and publicity

Direct marketing

Interactive marketing

Word-of-mouth marketing

Personal selling

At this stage, let us explore the relevant promotional techniques adopted by Nestle Slim Milk.

Advertising:

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Nestle Slim Milk has done effective television advertisements. Advertisements featuring healthy young urban couples were a huge hit as they effectively tapped the growing health conscious customer base. The ad featured couple holding up ideal body placards over their body and singing ‘Dil ki ye awaaz hai, i wanna look good.”

 

In addition to that it is very important that we understand the concept of Above the Line (ATL) and Below the Line (BTL) advertising and Through the line (TTL).

Above the Line (ATL) advertising is where mass media is used to promote brands and reach out to the target consumers. These include conventional media as we know it, television and radio advertising, print as well as internet.  This is communication that is targeted to a wider spread of audience, and is not specific to individual consumers. ATL advertising tries to reach out to the mass as consumer audience.

Below the line (BTL) advertising is more one to one, and involves the distribution of pamphlets, handbills, stickers, promotions, brochures placed at point of sale, on the roads through banners and placards. It could also involve product demos and samplings at busy places like malls and market places or residential complexes.

Through the line (TTL): “Through-the-line” marketing is the combination of above-the-line and a specific type of below-the-line activity that is direct marketing. The essence of “through-the-line” marketing is to use mass advertising for forming a prospects / customers database which can be used for direct marketing activities e.g. an ad in a magazine in which a toll-free number is displayed that is used for direct contact with prospects.

ATL

Nestle Slim has only resorted to two types of advertising modes: Television and an unique print ad.

 

print ad 3        print ad 2 

Prior to the launch, Nestle Slim Milk came up with an interesting three  part campaign depicting how a fit cow races against all odds to achieve the impossible.

Word of mouth:

The word of mouth element always features as an integral part of promotion for all products across segments. The goodwill associated with the brand Nestle coupled with its easy availability across all departmental stores, grocers and vendors makes it easy for people to recommend the product to others thus facilitating word of mouth promotions.

Personal Selling:

As the product is available across retail stores of various kinds (departmental, grocer, vendor etc.), personal interaction plays a major role in helping the customer make up their mind about the product.

 

Nestle Slim Milk: Distribution

Distribution channel or the marketing channel plays a very crucial role in making the product available to the final customer or the target consumer.  There are various types of marketing channels or distribution channels. The relevant ones in case of Nestle Slim Milk are:

 Push and Pull Strategies:

push and pull

 

print ad 1

 

In push strategy, manufacturer uses his sales force, trade promotion, money or other means to include intermediaries to carry promote and sell its products to end users. Nestle Slim Milk utilizes this form of strategy by sourcing their products to retail, grocers and other outlets.

In pull strategy, manufacturer users advertising, promotion and other forms of communication to persuade the consumer. This is the form of communication Nestle Slim Milk prefers and uses. (the print ad campaign)

Direct and Indirect Channel:

distribution_types

 

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Direct channel- the type of distribution channel where the producers directly provide the finished goods to the customer without any intermediaries.

Indirect distribution- Indirect distribution channel consist of one or more intermediaries between the manufacturer and the final customers. Nestle Slim Milk utilizes this form of distribution to reach out to its Target group. Thus Nestle again uses a combination of both the forms of distribution to source their products into the market.

It can be observed that Nestle forms an unique form of distribution, which can be understood better with the figure below:
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Recently Nestle has improvised their distribution process as can be seen below:
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Nestle Slim Milk: Pricing

The price of a product may be valued equivalent to what it costs a consumer.
For a consumer, price is the amount of money invested in a product/service and the proportional value to be enjoyed/benefits of purchasing a product, as compared with other available items.

The concept of value has been already expressed in one of the previous posts as:

 Value is the net benefit derived from a product or service.

A customer’s motivation to purchase a product stems from a need and a want:.
• Need: ‘I need to drink milk’
• Want: ‘I want to drink Nestle Slim Milk’
The second motivation comes from perceiving the prominence of the brand and a desire to consume healthy milk,

The perceived value of a product is subjective for a customer and differs in many respects.
Perceived benefits are often largely dependent on personal taste (e.g. chilled milk vs heated milk). In order to obtain the maximum possible value from the available market, businesses try to ‘segment’ the market – that is to divide the market into groups of consumers whose preferences are broadly similar – and to adapt their products to attract these customers.

In general, a products perceived value may be increased in one of two ways – either by:
(1) Increasing the benefits that the product will deliver, or,
(2) Reducing the cost.
(3) Positioning it as a Premium Product

For consumers, the PRICE of a product is the most obvious indicator of cost – hence the need to get product pricing right.

The factors which determine the effect pricing has on customer decision can be broadly classified under.:

1. Standard of Living

2. Competition

3. Income/Capacity to buy.

For the seller, price is the revenue generating element of the marketing mix making it an integral part of the process. For most FMCG  products, the following aspects are considered while setting a price for the product.

i.         Manufacturing cost

ii.        Market places

iii.        Competition marker condition

iv.        Quality of product

As discussed in the previous post on competition, Nestle Slim is priced higher than its competitors in the same segment- Britannia, Amul etc. At Rs. 80, Nestle Slim Milk is classified as a premium product (as far as packaged milk is concerned).

The high pricing can be attributed to two things:

1.  Nestle- the value, trust and goodwill associated with the brand

2. The product contains only 0.2 % fat, which is 95% less than the fat in cow or buffalo milk.

The success of this product only strengthens the belief that despite being priced high, Nestle Slim Milk has a solid and loyal customer base.

Nestle Slim Milk: Setting Product Strategy

Overview: Establishing Linkage

Marketing Mix has always been associated with the four Ps, namely Product, Price, Promotion, Place  (Distribution) and a recent addition of the word People. The inclusion of the word people possibly has a lot to do with changing definitions of Marketing through the ages. As marketing branches out of the traditional business oriented definitions, the scope broadens and so does the function.

In order to implement the four Ps model successfully, it is integral to align it with the 4As model charted by Jagdish Seth and Rajendra Sisodia. The 4 As in the model are Awareness, Acceptability, Affordability and Accessibility. 

So how do the 4As and 4Ps come together? Let us find out.

A good marketer taps into the pulse of the audience and understands their concern before implementing his Marketing Mix model.

  • Before you launch a product, it is important to make the target audience comfortable with it, which is why the marketer addresses the requirements of his TG and develops a product which they will find acceptable

In case of Nestle Slim Milk, the product was launched with high nutritional and low calorie ingredients thus appealing to the health conscious TG.

  • The price is often a deciding factor for most buyers which is why it is important to identify your TG and make it affordable to them.

Nestle Slim Milk is a premium health drink (when compared to the likes of Amul and Good Life) and targeted at the young MNC professionals who can afford to buy it.

  • Identifying the correct place to display your product is integral in its rise because it addresses the question of how accessible the product is to the TG.

You will find cartons of Nestle Slim Milk across all departmental, grocery and general stores in tier 1 and tier 2 cities, especially the IT hubs.

  • Once the product has been conceptualized, It is extremely important to create awareness for the product among the target audience and this is achieved via promotional activities.

In case of Nestle Slim Milk, the campaign for young healthy working professionals started ahead of the launch appealing to many health conscious urbanites.

Thus it can be said that a intelligent collaboration of As with Ps = Successful Marketing Mix.

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Product

The first P of Marketing is the Product- an entity that sets the wheels of Marketing Mix to motion. Conceptualizing of the product is an important aspect of Marketing but it is equally important to set the product strategy. The product is a tangible offering with multiple layers, which create a path for marketers to sustain their offering in the long term. The layers are:

(1) Core Benefit
Core benefit is the core need that the product intends to satisfy. This boils down to a very basic level and can be fulfilled by any product in the given category.

For Nestle Slim Milk consumers, the core benefit derived is drinking milk. The basic need to consume milk is fulfilled by the Nestle Slim Milk.

(2) Basic Product- 
Once the core benefit is identified and met minus any value additions or tweaks, we can address the basic requirement.

The basic requirement fulfilled by Nestle Slim Milk is the need for a low calorie high nutrition variant of the milk.


(3) Expected Product-

Once the basic benefit is met, we move the next level which includes all the additional attributes which are associated with a product of that type.

Once the slim element in Nestle Slim Milk is identified, it has to fulfill the traditional criteria of a sanitized tetra pack, pasteurized milk, easy to use packaging and a shelf life of 120 days.

(4) Augmented Product-
The augmentation of the product leads to it being distinguished from its competitors and other products in the same range.

Nestle offers multiple range of milk products and 2 other variants of packaged milk apart from Nestle Slim Milk. These are Nestle Millk and A+. It is necessary for Nestle Slim Milk to distinguish itself from both in house and other competition. This is where the packaging and marketing information about the product comes into play. For example, Nestle Slim Milk markets promotes its unique offering in this way:

“Nestlé Slim Milk is a great everyday solution to help reduce your fat intake. It has less than 0.3% fat with 70% less calories when compared to buffalo milk. NESTLÉ Slim Milk goes through Ultra Heat Treatment to provide bacteria-free milk to its consumers. Nestle Slim Milk is the result of continuing efforts by Nestle to help your lead a healthier lifestyle.”

(5) Potential Product-
The potential product is an umbrella of opportunities. It includes all the uses, future prospects and alterations that the product can have in a wide imagination. This is an exciting idea for the customer who always hopes to milk more out of an existing purchase or related items. For example: People bought Moto G and X because apart from having the latest android OS, it promised of regular android updates.  These updates have not been even launched yet but manage to entice customers.

In the case of Nestle Slim Milk, there is no scope of potential benefit as it has extinguished all possible alterations and will continue to sell as a calorie-free milk.

We can integrate the layers of Product with the 3C model proposed by Kenichi Ohmae. The 3Cs model of strategic advantage states that sustaining comeptitive advantage in the market depends on 3 forces namely- customer, competitor and competitor. This model is used in the decision making process and in understanding the behavior of the market. It can be linked to the product layers and benefits to understand why a consumer choses one good over another.

The core benefit arises from the customer since it is nothing but the customer requirement. This human requirement as stated earlier is met by the basic product which is provided by different manufacturers. Moreover, there is the expected product which is settled in the minds of the consumer and is used by him/her to choose from various similar products in the market. The companies, by themselves provide the augmented and potential product to the consumers to help them make a choice amongst these providers. The customer matches his requirements and expectations with the different offerings being provided in the market and choses a product or firm to find a service from it. Companies can understand their positioning in the value understanding of the consumer and thus make better decisions and products for the consumers