Nestle Recommendation

Nestles

RECOMMENDATIONS

Objective

Nestles market share of the chocolate/confectionary is currently at 20.0% compared to that of Cadbury at 34.1%. Based on this it is clear that Cadbury is ahead of Nestle in the Chocolate/confectionary department. A big reason for this is chocolate blocks. Cadbury successfully re-launched there Cadbury dairy milk chocolate range in 1996 and it has since become a large seller. So big in fact that a AC Neilson ratings test showed that Cadburys Dairy Milk Chocolate range in 2003 was the largest selling chocolate on the market. Block chocolate is also the largest improving seller in the Chocolate market also

Strategy

All this being said it Nestles has not got a block Chocolate on the market. One of the key recommendations or aims for Nestles should be to break into the Block chocolate market and compete with Cadburys 60% share of the block chocolate market worth US$174million

.

Objective

Nestles slogan for confectionary also needs to be improved. Nestles slogan is “good food, good life”. Because Nestles is such a huge company extending into the food and beverage range, Ice Cream and nutrition range the slogan may be appropriate for other sections of the Company but it is not appropriate for Chocolate.

Strategy

A recommendation for Nestles would be to keep the “good food, good life” for other sections of the company but change the slogan for confectionary. Something like “The Home of Chocolate” or anything else would be more beneficial to Nestles as Chocolate is an indulgence food which most people really don’t worry if good for them.

Objective

Overall Nestles spends $50millionUS on media advertising annually. This is quite a lot and is comparable to Cadburys adverting expense. However Cadburys advertising as of late has been far more successful then Nestles. Cadburys recent advertising of there block chocolate has lead to an increase of 29.0% while Nestles biggest seller Kit Kat has declined 7.2%. This is due mainly due to the fact that while Cadbury has been pushing just the one product (block chocolate) the Kit Kat has come up with new flavours such as passionfruit and at Christmas time truffle or pudding. These new marketing ideas never took off and lead to a decline in overall sales. Cadbury has stuck to pushing old products which are much less risk while Nestles has been trying to push new flavours. Too much at once, may been the reason for the decline in sales. All has not been bad news however though with Nestles with Smarties been boosted by 62.6%.

Strategy

Recent advertising has proved that pushing new products is hard therefore Nestles should re-think there strategy and promote there old reliable sellers. Perhaps instead of Nestles continue to develop already made brands such as Kit Kat Truffle they could promote the old brands but also come with new products altogether, not by-products. Nestles could return to old advertising campaigns such as “Nestles Milky Bar” commercials that although old led to large sales yet Nestles has stopped the Milky Bar commercial campaign in 2001 and Milky bar sales have declined 13.1%.

Objective

The leading country for consumption of chocolate is the UK which eat 14.2kg (per