Case Study on Brand Architecture of Nestle

Introduction

Nestle is a leading brand in its outright context, and many consumers view the relevance of the company whenever they come into contact with products branded Nestle. For a company to prove that it is a leading food company, it has to offer the customers increasing products that they can easily identify in the market as explained by Keller (2003). Nestle remains the valuable and well-recognized brands in the market because it is the largest chocolate manufacturer in the modern world (Waheeducp, 2014). The company’s brand management strategies remain unique due to the established brand portfolio encompassing strategic worldwide product brands, global corporate strategic brands, local brands, and regional strategic brands. Nestle has maximized the success of the funding products through successive extensions thus strengthening its relationship with customers (Wisdom IT Services, 2016). The company has achieved its business objective because of its outstanding brand architecture as designed in th

Brand Architecture for Nestle with Status of Family Brand

The Nestlé’s brand architecture shows its branding strategies that have proved Nestlé’s efficiency based on the regular well-founded and coherent responses. As exhibited in the brand design below, each product brand has a labeling of Nest thus confirming that they are genuine products of Nestle. The name of the parent brand or company appears on the package of each product so that it can motivate or it assumes the commercial rand value for products. Keller (2003) holds that Nestle shows that all the goods carry Nestlé’s values of health, taste, and family. Nestle has thus become a living brand with the feature nest acting as a supreme guarantee to the doubting consumers. Similarly, in each of these products, Nestle takes moral responsibility and endorsement where customers can easily use the contacts provided in the package to report any deviations that undermine the integrity of the firm.

The brand architecture is a strategic corporate brand having the status of the family brand because it covers different product categories such as baby products, chocolates, chocolate bars, ice cream, children products, and fresh dairy products (Gray, 2012). These products capture the interest of the targeted customers such as children thus compelling the firm to introduce a range brand products. Wisdom IT Services (2016) reports that the Nestle brand architecture confirms that it has remained relevant to the market for the last 150 days, and it thus celebrates its successes with customers through the range brands (Tejas, 2014). As part of its brand strategies, Nestle values the upcoming generations such children to be certain about the future market.

Brand Potential of Chocolate and Confectionery

Nestlé’s sustainability development remains bright as it continues to increase the access to high-quality food products and contribute to the long-term economic and social developments, and also preserving the environment as reported by Nestle (2002). Nestle incessantly creates a fundamental approach focusing on the long run sustainable values for its employees, customer, consumers, shareholders, and the society. Nestlé’s corporate business principles favor the long-term business development goals than the short-term profits (Tejas, 2014). Nestle has established an outstanding strategy to ensure that chocolate and confectionery product remains relevant to the market.

Brand Equity

Nestle has established a strong and reliable relationship with stakeholders such as customers worldwide. The Nestle equity brand is defined based on the target market including chocolate, nutrition, ice crème, yogurt, healthcare nutrition, and performance. The aforementioned brands have established a strong connection to customers in the competitive market. The company’s brands have created multiple food products that serve the interest of the domestic market. Indeed, Nestle has created a brand leadership because it can communicate consistent messages to the targeted consumers. By running a consistent global advertising and branding program, the company seems to minimize the complexity and cost of managing the campaign. In fact, the brand has adopted a message to local preferences thus making it a global brand leader (Van Den Bos, 2016).

Distribution Strategy

Nestle has also created one of the best distribution strategies that ensure its product remain available to the consumers to buy whenever and wherever they wish to purchase. In most cases, the sales of chocolate and confectionery depend on the availability. The market research had indicated that over sixty percent of their purchase is made based on impulse response (KPMG, 2016). Nestle continuous to supply these products to many outlets including retailer and wholesaler channels. Similarly, Nestle has noted the point of sales merchandising, especially when customers make snap and instant decisions from the product view (Aaker & James, 2000). With the instantly recognizable packaging, the customers get tempted to make impulse buying.

Promotional Strategy

Nestle has opted for a broad range of promotional strategies to market its chocolate and confectionery brand. The promotion offers the firm has used to attract more customers include free chocolate bars, particularly attached to the multi-bar family packs. Previously, the company offered free burgers as a promotional offer to increase sales of the product. Similarly, the firm has also used on-pack promotional features that allow the consumers to win prizes and cash (Reponen, 2000). The move ensures Nestlé’s sales of chocolate and confectionery increase. The chocolate’s advertising concentrates in the television commercials, posters, and social media. In these media, the powerful color of the product’s package has pulled customers towards it. It remains the responsibility of the marketers to appeal to the consumers. In most cases, women account for about thirty percent compared to sixty percent of children.

Pricing Strategy

Nestle understands the significance of maintaining a strong brand image. Given the competitive market, the company embraces the flexibility of pricing strategy. Aaker and James (2000) argued that in any imperfect market situation, the producers must concentrate on the non-price competition. The pricing of chocolate and confectionery shows a real price that remains stable. Therefore, with this price stability, the company can be certain of its future revenues.

Aggressive Branding Strategy

The strategy has ensured the company purchases established brands and limit start-up risks and costs regarding the launching of new products. The move has ensured the firm minimizes the point-of-parity because Nestle acquires competition (Reponen, 2000). Nestle enjoys a first mover advantage by entering new segments thus make a point-of-parity to the rivals. The company will thus continue to control the market beyond the reproach as the point-of-parity remains evident.

Conclusion

Good Food, Good Life appears to have summarized the Nestlé’s mission by balancing its nutrition and taste thus helping consumers to make healthier choices. The brand mantras seem designed to capture the brand’s uniqueness. The brand-point-of-parity is also critical in achieving the brand positioning. The paper has addressed the long-term potential of chocolate and confectioneries.

References

Aaker, B. & James, T. (2000). Brand leadership. New York, NY: Free Press.

Aaker, D. & Joachimstaler, E. (2000). The brand relationship spectrum: The key to the brand architecture challenge. California Managements Review, 42(4), 8-25.

Gray, N. (2012, Jun 04). Dark chocolate consumption linked with heart benefits. Confectionery News. Retrieved from https://www.confectionerynews.com/Markets/Dark-chocolate-consumption-linked-with-heart-benefits.

Keller, K. (2003). Brand synthesis: Multidimensionality of brand knowledge. Journal of Consumer Research, 29(4), 595-600.

KPMG. (2016). A taste of the future. Retrieved from https://www.kpmg.com/Global/en/IssuesAndInsights/ArticlesPublications/Documents/taste-of-the-future.pdf.

Nestle. (2002). The Nestle sustainability review. Retrieved from https://www.nestle.com/asset-library/documents/reports/csv%20reports/environmental%20sustainability/sustainability_review_english.pdf.

Reponen, T. (2000). Management expertise for the new millennium. Turko: Turko School of Economics.

Tejas, Y. R. (2014, Oct 30). Brand analysis-Nestle. Slideshare.net. Retrieved from https://www.slideshare.net/RajaTejasYerramalli/nestle-brand-analysis-global-perspective.

Van Den Bos, L. (2016, Mar 10). Nestle reimagining confectionery unit by creating brand leadership. Euromonitor International. Retrieved from https://blog.euromonitor.com/2016/03/nestle-reimagining-confectionery-unit-by-creating-brand-leadership.html.

Waheeducp. (2014, Jan 2). Nest final project. Slideshare.net. Retrieved from https://www.slideshare.net/waheeducp/nestle-final-project.

Wisdom IT Services. (2016). Strategic brand management. Retrieved from https://www.wisdomjobs.com/e-university/strategic-brand-management-tutorial-350/multi-brand-portfolios-1794/a-local-and-global-portfolio-nestl-11075.html.