MM Assignment 2

Marketing Management 1
Comparison of Marketing and Marketing-Mix Strategies
Table of Contents
1 Introduction.........................................................................................................................1
2 FMCG Industry Analysis....................................................................................................2
3 Market Share.......................................................................................................................3
4 Competitor Analysis...........................................................................................................4
5 Customers Analysis.............................................................................................................5
6 Competitive Advantage of Nestle.......................................................................................5
7 Competitive Advantage of Krafts Food.............................................................................6
8 Marketing Strategy.............................................................................................................6
9 Segmentation and Targeting Strategies of Nestle...............................................................6
10
Kraft Foods Segmentation and Targeting Strategies.......................................................8
11
Segmentation and Targeting Strategies Comparison.......................................................9
12
Positioning Strategies of Nestle......................................................................................9
13
Positioning Strategies of Kraft Food...............................................................................9
14
Positioning Strategies Comparison...............................................................................10
15
Marketing Mix of Nestle...............................................................................................10
15.1 Product.......................................................................................................................10
15.2 Place...........................................................................................................................11
15.3 Packaging..................................................................................................................12
15.4 Promotion..................................................................................................................13
16
Marketing Mix of Krafts Food.....................................................................................13
16.1 Product.......................................................................................................................13
16.2 Price...........................................................................................................................13
16.3 Place..........................................................................................................................14
16.4 Packaging..................................................................................................................14
16.5 Promotion..................................................................................................................14
17
Comparison of Nestle and Kraft Foods Marketing Mix...............................................14
18
Conclusion.....................................................................................................................16
19
Recommendations.........................................................................................................17
20
References.....................................................................................................................17
Introduction
Food is an essential component in our everyday lives. Not only does it allow us to stay alive,
but suitable quantities and quality also aid to ensure a healthier living standard by
contributing to our health and our wellness. The needs and expectations of the consumers are
linked with a specific food product are not permanent, but it vary with time and to the
geographic area, culture and the several phases of life.
Visit any supermarket around the world and you will be straightaway enclosed by an
astonishing volume of food. Numerous boxes of cereal, yogurt in different sizes and flavours,
thousands of condiments and the frozen food products the current supermarkets in United
States carry more than 38,000 food products. In China, where there were no supermarkets
existed in 1989, current the annual sales of the supermarket is of total $100 billion. Even if
the large number of products shows that the consumers have a great deal of choice in the food
products but the actuality is that the most of those cans, boxes and bottles are produced by
only few companies.
This purpose of this purpose is to compare the marketing and marketing-mix strategies of the
two big names in the FMCG food industry, Nestle S.A and Kraft Foods, in order to identify
that how well these organizations have implemented their marketing strategies to gain this
position in the global markets. Both of these organizations are in the Food and Beverages
businesses but this research will focus on the Food Strategic Business Units of these
organizations.
The reason to choose these two organizations is quite clear that they have a fierce competition
in the food industry. Overall, Nestle is the market leader and Kraft Foods is the challenger in
the industry but in some of the regions like North America Kraft Foods is way ahead of
Nestle. This study will examines and analyse most of the marketing aspects these
organizations follows to get the competitive advantage on each other.
In the later part of this study the marketing mix of Nestle and Kraft Foods is examined which
is majorly based on the study of the past researches on this topic. The recommendations are
majorly based on the on the consumer survey questionnaire (refer Appendix A)
FMCG Industry Analysis
Compared with the general environment, the industry environment has a more direct effect on
the firms strategic competitiveness and to earn above-average returns. The intensity of
industry competition and an industrys profit potential are functions of five forces of
competition such as the threat of new entrants, bargaining power of supplier, bargaining of
power buyers, threats of substitute products, and intensity of rivalry among competitors
(Hanson, D., Hitt, M., Ireland, R. D., & Hoskisson, R. E., 2011, p.48). Porters Five Forces
Model was created to act as a framework for industry analysis and business strategy
development. Porter singled out five different forces that impact competitive intensity which
portrays an image of the overall attractiveness and profitability of a market. To aid in my
evaluation of Nestle and its status in the industry, I will apply Porters Five Forces Model to
the company.
2.1
Threat of New Entrants
The food processing industry is very large and competitive. It is uncommon for firms within
the industry to do quite well. As a result, many companies enter into the market every year in
an attempt to gain a portion of the profitable market. For Nestle and Kraft Foods, the
organizations luckily has been around for over a century and boasts a long history of quality
products and consumer satisfaction, which has allowed the company to obtain a considerable
share of the market. As a result, new entrants into the industry must attempt to seize a portion
of their market share in order to survive. Essentially, both organizations are constantly a
target, and so the threat of new entrants is moderate.
2.2
Bargaining Power of Supplier
Nestl and Kraft Foods pride their selves on creating and maintaining positive relationships
with their suppliers all over the world. Due to the large purchasing power of these companies,
and because the suppliers of agricultural commodities offer a product that is far from unique,
both of the organizations holds more bargaining power than its suppliers. Aside from this,
they prefers to create and preserve long term relationships with its suppliers as this helps to
ensure the quality of their raw materials being purchased. In addition, they also offer useful
advice to its suppliers on how to perform more efficiently to minimize unnecessary costs.
2.3
Bargaining Power of Buyer
Customers have a large amount of bargaining power regarding to their consumption of Kraft
and Nestl products. There are close substitutes for their products which allows for the
preferences of the customer to be very influential. Nestl understands the power of the
customer and has taken specific steps to meet the needs of its products consumers. Both of
the organizations are incorporating health and wellness into their creation of its products as
society has started becoming more health conscious.
2.4
Threat of Substitute Products
Due to the nature of the industry, Nestl and Kraft Foods are afflicted with the threat of
substitute goods. Ranging from ice cream, frozen foods and confectionaries to pet food, there
are arrays of similar products that compete directly with them. It is vital for Kraft Foods and
Nestl to continuously find new ways to improve its products and generate new sources of
growth for the companys future expansion because competition is so violent. In recent years,
both of the organizations have focused on the health and wellness aspects of its products to
maintain its edge in the market.
2.5
Intensity of Rivalry Among Competitors
Nestle and Kraft Foods is powerhouse in the food processing industry but so are Sara Lee,
and Unilever, both of the companies was also facing strong competition at the national and
regional level. These companies, among others, are in a constant and continuous battle to
outperform one another. Both organizations were increasingly facing fierce competition as
many food producing rivals had achieved significant improvements in their operating
efficiency. Rivalry is fierce in the food processing industry, and this is a good thing for
consumers. As long as these companies continue striving to one up one another, consumers
will continue to enjoy ever-improving product lines.
3
Market Share
Below is the global Fast moving consumer goods (FMCG) market share graph.
Source: Euromoniter, 2013

From the graph above it is obvious that the Nestle has the largest market share in the global
FMCG market and they are also the leaders in the global presence and Kraft Foods is the
market follower.
4
Competitor Analysis
Nestl and Kraft Foods are the key driver in the FMCG industry likewise Sara Lee, Unilever
etc. These companies were confronting fierce competition at the international and national
level. These organizations, amongst the rest, are in a continuous combat to leave behind one
another. Both Nestl and Kraft Foods were all the time facing more competition as numerous
food manufacturing competitors had attained substantial improvements in their operational
efficiency. Competition is ferocious in the food industry, and this is a worthy thing for the
consumers. (Scribd Inc., 2012) As long as these organizations continue endeavouring to one
up one another, buyers will carry on relishing ever-enhancing product lines.
Kraft Foods and Nestl are the key competitors in the FMCG industry, as they functions in
several of the similar segments, which includes crackers, drinks, cheese, convenient meals
etc. A few prominent trademarks are Oreos, Tang etc. Kraft has an extensive history of
acquiring companies. Cadbury is one prominent current acquisition. Cadbury formed in 1824
and was sovereign until 2010, when it was acquired by Kraft. (Scribd Inc., 2012)
Further refer Appendix 2 for the competitors and their product lines.
Customers Analysis
All the big players in the FMCG industry are committed to offer the best quality food
products that are safe, tasty and affordable to their consumers. For instance Nestl and Kraft
Foods Seal of Guarantee is a sign of this obligation. These two FMCG organisations also
have faith in in keeping consistent contact with their consumers. This applies both to how
they exhibit their products and to how they address to their consumers' queries and concerns.
Customers have enormous powers concerning to their consumption and the quality of the
FMCG products. There are very close and enormous substitutes for the products of Kraft
Foods and Nestl which consents for the preferences of the customer to be very significant.
Both of the organizations understand the influence of the customer in the FMCG markets and
they have taken specific steps to meet the needs of its products consumers. For instance, as
the society is becoming more health conscious, Nestl started integrating the health and
wellness steps in the manufacturing of their products.
6
Competitive Advantage of Nestle
According to Hanson, D. (2011), each product on the rack, each service and each client
contact serves to shape this image. A Nestl brand name on a product is a guarantee to the
client that it is sheltered to consume, that it consents to all regulations and that it meets
elevated expectations of quality. Clients anticipate that Nestl will keep this guarantee against
all odds. By no means will the organization bargain on the safety of the product and each
exertion must be made to avoid hazards to wellbeing. Similarly, consistence with all
significant laws and regulations is an unquestionable requirement and is not debatable.
Individuals, instruments and equipment are made accessible to guarantee health and
conformity of Nestl products at all times. Organizations with tremendous quality measures
commit less error, squander less time and money and are more productivity. They
additionally make higher earnings. Quality is Nestl's best product. It is the way to their
prosperity, today and tomorrow (Castelar Articles, 2011).
We live in the world of competition and must always remember that the consumer have a
choice. If the products of do not satisfy them, they will change to an alternate brand. Nestl is
hence giving prevalent esteem in every product classification and market sector in which they
compete. The quest for most good quality at any cost is no guarantee for success, nor is a cost
cutting approach. Enduring competitive advantage is extended from a balanced search for
optimum value to consumers, by simultaneous enhancement of quality and saving cost.
Accomplishment can at no time be taken for granted. Nestl must lookout and learn from
their competitors. If they do a bit better, they must increase their own performance. Nestl
can attain competitive advantage through their Quality (Hanson, M., 2012).
Nestle has competitive advantage on the base of its matchless geographic existence globally
as well. Launched from the Swiss cultures, the organization grew and coped to create a
presence worldwide. Nestle has established firm relationships with the suppliers with the
development of management teams, R & D and manufacturing (Nestl, 2012).
7
Competitive Advantage of Krafts Food
KRAFT FOODSs main competitors provide different differences of the same product. Sara
Lee has a expand pantry of confectionery, Nestle provides bottled water mixes, milk and
healthy and good tasting baby formula, ConAgra Foods Inc. provides frozen dinners.
KRAFT FOODS exceeds the competitors with impressive ideas and provides products at the
good price.
8
Marketing Strategy
It is predictable by the marketing function of an organization to develop a marketing strategy

for every target market of the product, which comprised of the formation of the marketingmix. The Marketing Mix comprised of the multiple features of the subsequent five elements
in the FMCG industry: a product, its price, packaging, where is it distributed and how it is
promoted. These aspects are envisioned to satisfy the needs of the target markets and on the
other side similarly important marketing objectives for the company. The strategy of the
company is steered by numerous essential principles. Nestl and Kraft Foods existing
products grow through steady creativity, innovation and renovation while maintaining a
balance in different geographic events and companys other product lines.
9
Segmentation and Targeting Strategies of Nestle
Majorly, Nestle classify the market by means of demographic and psychographic

segmentation based on consumer characteristics (Ireland, R. D., 2011). Nestle uses
demographic factor to segment its market as well, it comprises on the level of income and
education. The education and income level can be categorized as low, middle and high level
customers. Apart from that, Nestle uses psychographic aspect to differentiate the market. The
segmentation variables that Nestle uses are personality, social class and lifestyle. Nestle can
groups individuals according to their personalities such as extrovert, self-disciplined or
energetic. Nestle divides their customers into low social class, medium social class and high
social class (Castelar Articles, 2011).
A target market is a potential market that a company has decides to concentrate its marketing
efforts and resources to enter those markets (Hitt, M., 2011). Nestle segments its market by
regions, income level, educational level, personalities, social class and lifestyle. By applying
the information and observations one can simply identify the target market of Nestle. In this
case, it is found out Nestle focuses on city areas rather than rural areas. The consumption of
Nestle products is often in cities as compared to villages. This may be due to educational
level and income. The people in rural area generally could not manage to pay for Nestle
products as it is considered as luxuries. They do not have strong sense of health awareness
because of educational level. These reasons make them the less attractive buyers. For
segmentation by income level, Nestle has been targeting on those consumer who earn middle
income and high income. People will purchase healthy and nutritious food when they have
enough monetary resources to back up them. Those consumers with higher income tend to be
the potential buyers for Nestle because they bring most profit into the company (Jones, S.,
2012).
Furthermore, for educational level Nestle tends to pay more attention to those consumers who
has an educational background. They will be more concern of their health and they will do
more to maintain it. Through education, we can improve our knowledge and develop life
skills which can contribute to individual and community health. Those people with an
education background are more likely to practice and maintain a healthy and balanced diet as
they know health is more important than wealth (Turpenien, J. 2010).
For personality segmentation, Nestle is targeting consumers who are more outgoing and
outdoorsy. It is because they entail additional energy and nourishment that they have
vanished through their activities. By become accustomed to the nutritional input to physical
essentials, they can get the most from their body. These people wish to maintain their energy
level and quick recovery after a hectic day by adapting a balanced diet that provides them
with essential nutrients and energy (Bar, D. 2010).
In addition, from the social class and lifestyle segments, Nestle is targeting consumers who
are belong to the higher social classes. They have high purchasing power so that they can
afford more luxuries such as Nestls products. These people are the target market of Nestle
because they tend to be more health conscious. Nestls products often emphasize on
nutritional value and health benefits that can improve ones lifestyle and health issues.
(Turpenien, J. 2010)
10 Kraft Foods Segmentation and Targeting Strategies
The food portfolio of KRAFT FOODS comes in four customer segment such as Grocery,
Convenient meals, Cheese and Snacks. KRAFT FOODS segment their consumers into the
following four groups:
i.
Wellness and Health: they are the healthy customs and KRAFT FOODS are giving
them different products. These customs want to eat healthier foods and have several
requirements such as calciums, vitamins, managing their weight etc. KRAFT
ii.
FOODS offers products that fulfil all the customers demands.

Quick Meals: they are consumers with busy and fast life; however they do not want to
miss the delicious foods. KRAFT FOODS have numerous ready to heat and ready to
iii.
eat products to fulfil their desires.

Snacking: they are the consumers who seek for on the go foods, KRAFT FOODS
Kraft gives a big range of snack products to those customers. Crystal light ready to
drink, Oreo wafer sticks are small number of the mostly sold snacking products of
iv.
KRAFT FOODS worldwide.

Premium: These are consumers who requests high quality restaurant similar to food in
their home. KRAFT FOODS fulfils the customers desires with premium foods such
as Cote dOr Chocolates etc.
Most products of KRAFT FOODS are sold to company consumers such as Safeway Stores,
Wal-Mart etc. The net revenues of KRAFT FOODS by its five top consumers are about 29%
and if it ten top consumers are taken into account it gets to 40%. Wal-Mart is the biggest
consumer of KRAFT FOODS which accounted for 15% of its total revenue. KRAFT FOODS
is mostly relies upon on few number of big business for its sales value, this development can
brings to bigger bargaining power to consumers such as Wal-Mart which is a negative point
to be regarded.
11 Segmentation and Targeting Strategies Comparison
From the segmentation and the targeting strategies of Nestle and Kraft Foods, it is depicted
that as compared to Kraft Foods, Nestles segmented the consumer markets in different
aspects depending on the geographical, demographical and the psychological means, whereas
Kraft Foods mainly target their customers by taking in to account the psychological strategies
of segmentation. In order to get the maximum share of the markets both of the FMCG
organizations are keen to provide the quality, healthy and nutritious food. As compared to
Kraft Foods, Nestle enjoys high number of sales of their food products because of their
enormous product portfolio, brand recognition among the consumers and their large presence
worldwide. Kraft Foods (Market Challenger) holds the second largest share of the market
followed by Nestle (Market Leader).
12 Positioning Strategies of Nestle
Product positioning denotes to the place a contribution occupies in consumers minds on
significant attributes relatives to competitive products (Ireland, R. D., 2011). Nestle
positioned itself as the world leader in Nutrition, Health and Wellness, trusted by all its
stakeholders, and to be the reference for financial performance in its industry. Nestle uses the
slogan Good Food Good Life to improve lives, through life, with good food. Nutrition
content in their products is the main focus to strengthen their leadership in nutrition industry.
To remain their position in that industry, they must identify their competitive advantages
against their competitors. Nestle has listed out four competitive advantages of their company
that may help their company to compete with their competitors, that are unmatched product
and brand portfolio, unmatched research and development (R&D) capability, unmatched
geographic presence and lastly people, culture, values and attitude (Pinheiro, 2011).
13 Positioning Strategies of Kraft Food
KRAFT FOODS is worlds second biggest food organization (Trevis, 2011). The organization
is good in the manufacturing and marketing of food items and confectionary. KRAFT
FOODS acquired Cadbury which no uncertainty improved its profit ratio to several folds but
it as well included so much debt stress on the organization. Combined with the debt demands
the organization deal with cut throat competition with Harshey and Nestle in the markets.
Even with of its businesses in numerous presence and markets in United State and other
marketplaces, the organization is vulnerable on geographic focus. KRAFT FOODS has high
margins in Grocery Company but low market share (Trevis, 2011).
14 Positioning Strategies Comparison
From the positioning strategies of the two FMCG organizations it is analyzed that Nestle
positioned itself as a market leader by penetrating in the global consumer markets through the
consistent market and product development strategies. Nestle enjoys a strong Market Position
in their food SBU in the European countries, whereas, Kraft Foods faced many problems that
are related to the acquisition of Cadbury. There were number of protest between the British
people against this acquisition. The market position of the organization decreased
consequently during this period. The consumers stopped buying the Kraft Foods products,
therefore, harming the market position of the organization negatively in the European
markets. (YouGove SixthsSense, 2011)
The acquisition added no improvements to the
organization as they failed to use the proper positioning structure in the markets and failed to
effectively use the resources of Cadbury. There is probability that this acquisition will lose
KRAFT FOODS customers.
This does not end here, the organization deal with fierce
competition with Nestle; the biggest Competitor for Kraft Foods.

15 Marketing Mix of Nestle
The 4Ps of one of the powerful FMCG corporations in the globe is argued by the marketing
mix of Nestle. The marketing mix of Nestle proves Nestle has a powerful manufactured
goods line that improves its marketing mix. The products, price, placement and promotions of
Nestle are listed below.
15.1 Product
There are two dissimilar tactical business units under the food section within Nestle which
are used to run a variety of food products.
Cooking Aides and Ready Dishes: Nestle has a first group of products which comes into
cooking aides and ready dishes. The most important cash cow of Nestle is in this section,
which is Maggi Noodles. Maggi is most likely one of the mainly extensively sold ready to
cook noodle brands. It has an extraordinary flavour and excellence. Therefore, it was not a
shock, that Nestle enlarged the Maggi brand to form a variety of dissimilar products like
Maggi pasta, Maggi cubes, and Maggi sauce. The base line of Nestle is devoted greatly by
the Maggi collection.
Chocolates: There are a few well-liked chocolate products in Nestle, and the most well-liked
being Nestle Kitkat, Munch, Milky bar, Eclairs and Polo. Alpino which is recently launched
is aiming the gifting section in reaction to a variety of chocolates like Dairy milk and
Bournville by Cadbury. In Nestle, the chocolates section is a leading light, where the rivalry
is strong and the cost is high but the market size is enormous too.
The noticeable feature in Nestle is that value preservation of products is up to mark and there
are barely any criticisms about Nestles products in the marketplace. For a corporation that
mainly has trust in food products, this is a very important accomplishment for them.
Price
The price of each individual product is reliant on the marketplace. For example, Maggi being
the obvious frontrunners are charged with greater boundaries for the corporation as compared
to rivalry. This is because the product value is excellent enough and a bit of skimming cost
will not make the buyer to change brands.
The casing or intake based cost brings the power of pricing for Nestle. For Maggi, Nestle
presents many volumes and package alternatives. A 16 packet Maggi can be found in
supermarkets, whereas a single unit of Maggi can be found in small retail stores.
15.2 Place
The FMCG approach of supply which engages in breaking the bulk is followed by Nestle.
Below is the usual supply approach of Nestle.
Manufacturing >> Clearing & Forwarding Agent >> Distributors >> Retailers >> Consumer
Manufacturing >> Bulk buyers >> Consumer
These are the two dissimilar figures of supply which Nestle has. It is usual of any FMCG
corporation. However, the Nestle channel is known to be tough with an excellent marketing
and trade system for channel supply.
The chocolate section is the biggest threat for Nestle. This is where it encounters strong
rivalry from Cadbury and therefore it becomes hard to sell the chocolates. Dairy milk is more
superior than Kit Kat, even though Kit Kat has its own personal brand positioning. Therefore,
Nestles hardest job is to alter dealers to sell Nestle rather than Cadbury. This is altered
generally through advertisings.
15.3 Packaging
Nestl is altering the packaging of some of its products to make sure customers of every age
group can utilization them without difficulty. One approach in the year 2009, established in
the University of Cambridge, United Kingdom, is known as 'Inclusive Design'. Nestle was
the first food organization to adopt this method after being partners with the University.
Inclusive Design is a method which attempts to improve product design to fulfil the requests
of more consumers. Organizations can utilize an amount of specialized Inclusive Design
instruments to identify how they can make products easier to utilization. According to David
Wiggins, Head of Packaging at Nestl UK, Nestl is taking a lead role in the improvement of
this design philosophy. Inclusive Design lets the company to change from good design to
excellent design. All their customers are benefited by the preliminary design. Nestl also
seeks to allow its products minimises waste, preserves freshness, safe to use and provides
easy to understand instructions. According to Anne Roulin, Global Head of Packaging and
Design at Nestl Putting the customer at the centre of packaging improvement means,
making the products and the casing that are easy to utilization regardless of age, disability, or
physical disorder.
Nestles packaging acts as an important role in their marketing. Every package has what is
called the Nestle Nutritional Compass, to prove to customers what they will gain if they
buy the product. Nestles beliefs is that dietary information is not sufficient. The compass has
three essentials: Good to Know; which provides truthful information on dietary contents.
Good to remember; which provides instructions for fit way of life, cooking, and diet. Good to
talk; which requests the customer to call the Nestle customer service group or log on to the
Nestle website. (2006)
15.4 Promotion
The superb product value of Maggi and the amusing and new movements and campaigns of
Maggi pushed Nestls brand. Maggi concentrates on periods people had with their Maggi.
The latest campaign was entirely concentrated on the publics' Maggi tale, where the public
had to emerge with a variety of new techniques that they had their Maggi.
Advertising for other products too are prepared cleverly. Kit Kat concentrates on Take a
break and has done some excellent marketing. Kit Kats website is also very modern and
demonstrates nothing but inquires the person visiting the website to take a break and have a
Kit Kat. The sales advertising at the ground level is the main push expected of a FMCG
corporation. Nestle really has the strengths here and it concentrates on Maggi and Kit Kat
which are its main power and the most advertised brands in the marketplace on ground level.
16 Marketing Mix of Krafts Food
Kraft Foods is doing business in the buyer products area, thus its marketing mix is specially
adapted for its customers.
16.1 Product
Its major products are food items such as chocolates, biscuits, snacks and suitable meals.
Some of the corporations products have developed into important brands globally proving
that the corporation presents qualitative products and also knows what its consumers want.
The corporation favours to purchase its raw materials from third parties such as supportive
agricultural and independent manufacturers to guarantee high quality of the finishing product.
(Kraft Foods, 2009)
16.2 Price
The pricing rule of any corporation has to be detailed in such a way that it retain their present
consumers and also target the potential customers (Brassington and Pettitt , 2006 pg.431).
The corporation charges suitable and reasonable costs for its products. On the other hand,
these prices are disturbed by increase in raw materials, as was the case in 2008 when the
corporation had to increase costs to dairy, wheat, cocoa, nut or coffee products as an outcome
of price raises for the raw materials (Kraft Foods, 2009)
16.3 Place
The association's products have a broad supply, reaching many marketplaces globally. The
major places where the products can be financed are supermarket chains, traders,
convenience shops, mass merchandisers, club shops or sellers (Kraft Foods, 2009)
16.4 Packaging
The concern for Kraft Foods is to fulfil these aims although keeping the level of quality and
integrity of its products that customer has come to expect. According to Zellner (2011),
Packaging is one of the key focus areas of Kraft Foods because it makes a huge impact on the
buying behaviour of the consumers. According to Kraft Foods (2013), customers all over the
world say that they want packaging to less, and they expect a recyclable packaging. And they
also expect packaging to provide all the convenience and benefits they expectmaintaining
the products easy to utilization and store, fresh and safe, with clear product details such as
ingredients and nutrition facts that are easy to read and understand. Kraft Foods takes in to
concern what is needed by their customers.
16.5 Promotion
When discussing about advertising, Kraft Foods supplies significant quantity of money into
strong marketing campaigns which are intended generally to draw fresh consumers but also
to strengthen its image in the eyes of current customers. The corporation uses some of the
Marketing
New
ProductManagement 16
instruments in the promotional mix such as public relations, advertising, and sales
advertising.
17 Comparison of Nestle and Kraft Foods Marketing Mix
Nestle and Kraft Foods together concentrate on health and wellbeing, but rather than
concentrating on the main needs of the customers like Kraft Foods, Nestle concentrates on
their corporate wellbeing unit to get high-quality food, and excellent life to all of the
Existing Product
customers. Basically, they dedicate more time and attempt into ingredients then the real
customer.
The corporate wellbeing collection is a worldwide network that is internationally placed to
assist support the importance of nutrition. Their approach is to make sure to offer improved
tasting products that are better for consumers.
The product strategy is further analysed with the help of the Ansoffs Matrix
New Market
Existing Market
Market Penetration
Market Development
Nestle
Product Development
Nestle
Diversification
Figure 1 Recommended Strategy for TMC

Source http://www.mindtools.com/pages/article/newnest_90.htm
In order to get the maximum share of the market, Nestle is focused on the Product and
Market Development strategies. They are developing new products and augmenting the
existing for their existing markets and going in the new markets with their existing product
line. For instance, nestle is now more focused on the Asian Markets like China, India etc. by
positioning its diversified healthy and nutritious product range of the food. For this they have
opted the aggressive but innovated marketing tactics of their product line to the new targeted
markets in order to enhance their market share and to retain the label of market leader in the
food industry. On the other hand Kraft Foods is more focused on the product development
strategies; they are developing their products for the existing markets and are more focused in
the North American region.
These two companies are different in marketing because Kraft Foods is sticking to its profile
and even detached some of their products from its product line, but Nestle is making and
improving hundreds of Nestle goods. Also Nestles packaging plays a vital role in their
marketing. Every package has what is called the Nestle Nutritional Compass, to prove to
customers what they will gain if they buy the product. Whereas the packaging of the food
products of Kraft Foods is according to the consumers demand.
Nestles marketing approach is focusing towards the potential of their products, just like Kraft
Foods. They are working on goods that will be equipped towards gestational problems,
obesity, diabetes, Alzheimers and other items that will supply to the health and wellbeing of
the customers.
The distribution and the promotional strategies do not have much difference. For the
distribution both of the organizations follow the FMCG approach of supply. The usual supply
approach is as follows.
Manufacturing >> Clearing & Forwarding Agent >> Distributors >> Retailers >> Consumer
For the promotional activities both of the organizations have already a good repute in the
food industry, therefore for the promotional mix the both of the organizations depends on the
public relations, advertising, and sales advertising.
18 Conclusion
This study was based on the comparison of the marketing and marketing-mix strategies of
Nestle and Kraft Foods, that operates in the same Food Industry and are in a neck-to-neck
competition. Most of the marketing and marketing mix strategies adopted by these two
organizations are almost the same but Nestle concentrates more on their product as well as
the market development and that is one of the reasons that they have earned the title of
Market Leader since ages and till date they are successful in retaining that title. Whereas, in
some of the geographical regions like in the North American markets Kraft Foods holds a
way better position than Nestle. Even though both of the brands are working a lot on the
health, wellness and nutrition but Nestle is taking the full advantage of the market
development strategies by capturing the Asian markets and Kraft Foods is still lacking to do
so.
Another reason for the success of Nestle is the strategies they put forward for their brand
recognition through the expansion of their worldwide operations. Nestle is a brand which has
excellent food products as well as excellent marketing and marketing-mix strategies, and
therefore the brand has a super high brand recall worth.
This study clearly shows that one aspect of the marketing strategies influences the whole
marketing plan; this is what happened with the Kraft Foods in the European markets when
they acquired Cadbury. This lead the organization in the drop of their share of the market and
their sales were reduces. Based on this, some recommendations are developed for Kraft
Foods in order to gain back the share of the food market.
19 Recommendations
KRAFT FOODS can use some of choices available presently to get free of debt needs and
other frills that are resulting in low market share to the organization. First, KRAFT FOODS
can engage itself in the market development process. This can be reached in the developing
markets of Asia such as Japan, China, India etc. these markets show good prospective for the
business. Even though KRAFT FOODS have acquired Cadbury but numerous its resources of
revenue are continue to untapped to the organization. Cadbury is a main participant in the
developing nations and earns billions of revenues from its consumers in India, China and
other Asian nations. KRAFT FOODS can utilization Cadburys brand value to provide new
products in the developing countries markets to examine these markets and opportunities
current their further. Second, KRAFT FOODS can reposition itself in the current markets
with more health and unique cantered products. There is an improving development between
the consumers that they like to purchase original, organic and fresh products. The
organization can reposition itself in the market as a company of farm fresh products to get the
consumer attention.
20 References
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Marketing Management 1

Comparison of Marketing and Marketing-Mix Strategies

FMCG Industry Analysis

Threat of New Entrants

Bargaining Power of Supplier

Bargaining Power of Buyer

Threat of Substitute Products

Intensity of Rivalry Among Competitors

Source: Euromoniter, 2013

Competitive Advantage of Nestle

Competitive Advantage of Krafts Food

It is predictable by the marketing function of an organization to develop a marketing strategy

Segmentation and Targeting Strategies of Nestle

Majorly, Nestle classify the market by means of demographic and psychographic

FOODS offers products that fulfil all the customers demands.

eat products to fulfil their desires.

KRAFT FOODS worldwide.

The acquisition added no improvements to the

competition with Nestle; the biggest Competitor for Kraft Foods.

Figure 1 Recommended Strategy for TMC

http://articles.castelarhost.com/nestle_competitive_strategy.htm [Accessed 28 January 2015].

http://www.nestle.co.uk/aboutus/Pages/about-us.aspx [Accessed 29 January 2015].

http://www.nestle.com/AboutUs/Pages/AboutUs.aspx [Accessed 30 January 2015].

http://www.nestle.com/AboutUs/History/Pages/History.aspx [Accessed 30 January 2015].

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