Executive Summary
The food industry is constantly increasing, which make the need of the new product very vital for the future of the industry. Currently, the food industry is characterized by a gradual changing of consumer tastes. We will develop new product for Nestle referred to as Scafe type of coffee in the line of beverages. Nestle is the leading world food and beverage company, which produces a variety of products. The new product will address the social trends and changing purchasing behavior of consumers based on the health and lifestyle.
The marketing plan will address the situational analysis, which helps in assessment of the new product position and the state of the market. These include SWOT and PESTLE tools that will analyze to gain understanding of the internal, external environment and the marketplace of the new products. Similarly, the plan addresses the SMART objectives, which relate directly to the Nestlé’s entire aims and objectives. The marketing plan of new product will comply with the entire company strategy that is set out in a business plan. The plan will execute a reasonable budget that will help in the implementation process.
The marketing plan will address the product development process by the use of market-led approach employed by the Nestle to develop new products. In developing the new product, we will concentrate on appealing taste based on wellness strategy. The plan will evaluate how strategic planning will enhance the implementation process by creating commitment and ownership of the marketing plan. This will enhance the fit between the plan and the organizational real capabilities and resources, and prevent implementation barriers.
Executive Summary 2
Introduction 4
Situational analysis 5
SWOT analysis 5
Strengths 5
Weakness 5
Opportunity 6
Threats 6
PESTLE analysis 6
Political 6
Economic 6
Social 7
Technological factors 7
Legal 7
Environmental 7
Objectives 7
Strategy and Tactics 9
Product development process 9
Figure 1: market led Approach 9
Figure 2: Ensuring strategy fit 10
Marketing mix 11
Budget 12
Implementation 13
Gantt Table 14
Gantt Chart 14
References Lists 15
Introduction
The food industry has invested a lot in the new product development (NPD) to ensure the future success of product in the market. However, lack of proper development strategies ends up not sustaining the new product in the market. Therefore, a decrease in demand and high new product failure rates can put food industries at a big disadvantage in the growing competitive marketplace. Currently, the food industry is characterized by a gradual changing of consumer tastes. Hence addressing these changing tastes with new products is vital in keeping customer loyalty in order for NPD to become a main factor in competitiveness.
Several researches indicate that more products that are new can thrive if food industry changes the strategy of doing NPD. This has enabled Nestle, one of the world’s leaders in consumer led strategies to product development to stand the competition in the global market. Nestle is the leading world food and beverage company, which produces a variety of products. Nestle has captured the global market because it has determined social changes and change of purchasing behavior of consumers by producing quality products that meet customer needs. Since, Nestle operates via products divisions; we will create a marketing plan for new product under the beverage category. The new product will be referred to as Scafe, which will be in the form of coffee bags. Since many people are looking to adopt healthier lifestyles, the Scafe will have low quantity of nicotine and sugar which will be healthy for most people especially athletes. The marketing plan will focus on the objectives, situational analysis, strategy, budgets and evaluation among others.
Situational analysis
The main step in developing a marketing plan is to carry out an evaluation of the business, its products and brands. This comprises of assessment of the new product position and the state of the market. The new product (Scafe) requires knowing what its customer want and what competitor products exist. Similarly, the product will target the range of consumers including adults and children. The Scafe will use SHOT analysis to help assess the market. This considers a detailed research of the internal strength and weakness of the business, as well as external opportunities and threats in the market. Similarly, it will use PESTLE that will provide the context for the business based on the external environment.
SWOT analysis
Strengths
Nestle is a world producer of food and beverage company, this will gave the new product a strong brand recognition in the market. Nestle has a stable financial stability, so it has the resources to put together a powerful marketing campaign for the new product. Nestle has staff will appropriate skills to develop products that will meet the need of consumers and marketing team with the skills to assist promote the new product effectively.
Weakness
As the leading producing of beverages, Nestle need to beware of any weakness when developing new product. The company should analyze if the product range is still relevant to the target customers. It should evaluate if there are right sales and distribution outlets to cater for the new product. The new product will face challenges in its development if the market research is not updated.
Opportunity
One clear opportunity for Nestle is that the food and beverage industry is growing. Nestle has experienced an increase in sales of beverages and the new product will capture a greater share of this market. Nestle wants to take advantage of the social trends and changing purchasing behavior of consumers by producing appropriate products that meet customer needs.
Threats
Although there is growth of beverages market, there are threats. Consumers are becoming more experienced and price conscious in that they require intensive sales promotion such as discounts and offers to attract them. Moreover, there is threat of competitors entering the market. Nestle needs to differentiate its products. This will ensure in a growing competitive market, its marketing activity will provide a positive return on investment based on sales and profits.
PESTLE analysis
This focuses mainly the external factors of the company and what is happening in the entire world. This is done via analyzing political, economic, social, technology, legal and environmental factors. The PESTLE analysis is used together with SWOT to enhance its external criteria of opportunities and threats, and to gain understanding of the external environment and the market (Westwood, 2002, Pp. 67).
Political
The policies implemented by various governments might influence the development of the new product in the market. A variety of new legislation being implemented currently will influence the implementation of the new product.
Economic
Interest rate and completion are economic factor that will affect the development of new product in the market. The price competitor’s products will influence the price that Nestle will charge for the new product. The financial stability of Nestle will provide resources to be used in the development of new product.
Social
The social trends and changing purchasing behavior of consumers toward the products introduced in the market will affect the development of new product. People are changing their lifestyle that could affect the new product positively or negatively.
Technological factors
Technology is very vital in the development of new product in the market. The dedicated Nestle website will support the new product and offer information to educate consumers on the use of the product. The online marketing will also be vital for launching the new product in the market.
Legal
The new changing legislation may pose greatest threat to the development of new product. However, Nestle is a company that complies with legislation and code of practice, therefore the development of new product will be face legislation challenges.
Environmental
Nestle complies with the environmental legislation, thus the development of new product will not have any environmental risks. The development of new product will meet the corporate responsibility awareness and expectations.
Objectives
An effective marketing plan depends on setting clear and relevant objectives. These should relate directly to the business’s entire aims and objectives. This means the marketing plan of new product should comply with the entire company strategy that is set out in a business plan. The Nestlé’s CEO stated that its goal is to build a respected and trustworthy food industry that meet the needs of consumers in the market. Therefore, its objective is to develop products that meet the wellness of customers.
The marketing team will set SMART objectives for the new product development. These include specific, measurable, achievable, and realistic (provided the available resources) and time constrained obtained in a given period (Stone, 2001, PP. 17). The marketing team will use the research data to project market trends over the next two to four years. This will help the team to set specific targets for growing sales, increasing market share and promoting its brand image. The Nestle CEO wants to increase the global market share, but also want greater market development for the new product. This means the company does not only want a greater share of the existing market but also want to expand that market.
Nestle is willing to increase demand for the product in the market. The only aim is to move customers to beverage by making actual purchases. Its aim is to sell more beverage products to a wide range of consumers. A research team is constantly looking at ways to improve its products. Similarly, the objective of the company is to develop the new product brand image. The research indicates that more consumers prefer consuming coffee for relaxation. The Nestle has used this key fact a way to increase opportunities for sales. Another objective is to develop quality products that are reliable, user-friendly and have reasonable price. The brand’s core values are security closeness, trust and credibility. These values and capabilities will strengthen and expand on the development, to get more consumers to think of Nestle as a choice of beverages.
Strategy and Tactics
Product development process
Using the market-led approach, Nestle will introduce and develop the new product (Scafe). In developing the new product, the emphasis will appeal the tastes based on low nicotine and sugar. This focuses on product development together with an emphasis on consumer needs, which is a main differentiator for Nestle. It is a main reason why the Nescafe brand is still the market leader in the beverage market.
Figure 1: market led Approach
Source: adopted from Nestle, 2005
Another cornerstone of the new product development is a strategy. A strategy is the means by which company attains particular ends. The proposed strategy will answer the question on how to attain its objectives. For instance, Nestlé’s market research confirms that there is an increase of the numbers of consumers who want to purchase quality products that promote their health. The company will keep on capturing a greater share of this growing market via the new product.
The new product sought to use the Nestle strategy, created and developed for the future use. Therefore, Nestles strategy is to develop a wellness approach that promotes its tradition of producing health products. Wellness is a strategy that enhances health and a physical state, which is maintained by keeping good diet, physical exercise and good lifestyle. The new product will promote wellness, which relate to a feeling health and being in good condition. Therefore, an environment, value and resources (EVR) is strategic fit that is used to determine whether a proposed strategy is suitable for new products (Nestle, 2005). The new product development must match with these three elements. For the new product to match the Nestlé’s wellness strategy, it must comply with the prevailing environment, in which it will operate. In this case, the new product should match the emerging social trend and healthy lifestyle.
Figure 2: Ensuring strategy fit
Source: Nestle, 2005
The strategy of wellness should be consistent with the company’s values. The new product will comply with various business principles that have direct the company on how to operate. For instance, the main principle of Nestle is to achieve consumers’ needs for quality and healthy products. This is the reason why the new product will focus on market research and use best method to communicate with customers. For instance, the new product will communicate its value to promote wellness of the consumers.
The company should ensure it has adequate resources to support the strategy of developing new product. However, Nestle is well planned to tackle the development of new product that contribute to wellness because the product will focus on enhancing Personal health. The powerful brands and product capabilities will enable Nestle to position a new product to match increasing market. The company has the values and the resources to achieve new product development in an environment in which more customer are looking for health and wellness.
Marketing mix
The Nestle team will devise marketing strategies to deliver its objectives. These strategies plan how the objectives would be achieved within projected budget set by the management team. Nestle spends more on the development process in the food industry. It is looking at methods to develop new product. The company will use various advertising methods such as newspapers, social media and its website among others. There has been a significant emphasis on the need of consumer and increase use of experimental methods in the promotional mix. Experiential marketing deal with consumer via two way communications that bring brand recognition and add value to the target consumers. This assists in creating an emotional connection between the consumer and brand. Therefore, it is vital to balance the promotional mix in the development of the product.
Nestle can promote new product via a mixture of above the line and below the line promotion. The use of sports will form a powerful brand affinity for the new product. It will also allow the new product to build and keep a consistent relationship with customers to promote sales volume. The above the line promotion will include use of television which will reach a more customers. By use of sport, the new product will create a positive image of the people associated with the product.
Promotions will be used to attract new customers. For instance, the distribution of free samples will promote the trial of the new product in the market, which will increase purchases. These promotions will help to create awareness and consumer loyalty, which will strengthen the new product (Scafe) brand presence. There is dedicated Nestle website that will support the new product and offer information to educate consumers on the use of the product.
Budget
When developing a new product in the market, the budget is required to fund the plan. We will approximate the cost for developing new product. This will involve the personnel who will be required to create the product. The budget will include the cost of training sales staff to market the new product. Similarly, the budget will include the cost advertising new product in the television, creating websites, the cost of direct marketing campaigns. The budget will include the cost of events such as launch trials and trade shows. The legislation cost of developing new product will also be included in the budgets. We will also include the public relation cost in the budget because it is extremely vital in the development of new product. Since Nestle is financially stable, we expect it will finance the cost of developing this product. Similarly, we expect other contribution from interested shareholders that we will use to finance the budget. We expect the development of new product in the market to cost about $150,000 because we are certain it will capture a large percentage of consumers.
Implementation
The marketing plan is a cycle, which starts and ends with the implementation. This final stage is to implement the strategies to ensure the new product (Scafe) maintain the strong taste profile of the company. The implementation will focus on the following activities.
The company will ensure the new product is retained in order to match the growing demand.
There will be product reformulations to ensure the new product is low in sugar and nicotine.
Launching a new product (scafe) with scientifically ascertained nutritional benefits. The company’s product research and development network ensures to tackle challenges of changes in consumer behavior. The wellness strategy used in the development of new product ensures to deliver what consumers want based on the product they consume.
The company is looking to employ training program to educate consumers about the proper nutrition obtained from consuming the new product. This will be achieved because Nestle support various initiatives intended to create the new product awareness.
Since the wellness, strategy is a key driver of Nestle, the new product will ensure to promote the wellness strategy in order to meet the increasing demand of healthy products in the market.
Evaluating and monitoring the progress of the new product in commitment to high quality market research that ensure understanding of consumer behavior.
Gantt Table
Gantt Chart
References Lists
Nestle. 2005. Responding to Changing Customer Requirements: The Drive Towards Wellness. The Times Newspaper and MBA Publishing.
Stone, P. (2001). Make marketing work for you: boost your profits with proven marketing techniques. Oxford, How To Books.
Westwood, J. 2002. The marketing plan: a step-by-step guide. London, Kogan Page.
