Nestle pricing strategy

6. Prepared Dishes & Cooking Aids • Maggi- Penetration pricing strategy , pull strategy , higher margin , packaging or consumption based , value pricing, survival objective • Ketchup-Quality oriented , mark up pricing , quantity discount and high priced

7. Chocolate & confectionary • Competitive Pricing • Quantity Discount • Seasonal Price variation

8. Milk Production & Nutrition Baby food • Mark up pricing, quality oriented • Quantity discount Milk product • Discount pack • Different sizes and price range 10gm - Rs:10 200gm - Rs : 82 400gm - Rs : 155 750gm - Rs : 260 1kg - Rs : 391

Editor's Notes

The second P, price, is the amount of money customers must pay to obtain the product. 1) Signal To The Buyer - Price offers a fast and very direct way of communicating with your customers. The price is visible to your buyer and provides a basis of comparison between brands. Price also can be used to position your brand as a high quality product. And pricing in certain ways affect the Pscychology of customers. 2) Instrument of Competition - Price offers you a way to quickly attack competitors, or alternatively to position your business away from direct competition. 3) Improving Financial Performance - Because Prices determine financial performance, pricingstrategies will impact a business's financial statements both in the short and long term. Sales growth profit margin working capital management4) Marketing Program Considerations - Prices can also substitute for advertising and sales promotion, in addition to being used to reinforce these activities in the marketing program. For example, pricing strategy can be used as an incentive to channel members as the focus of promotional strategy and as a signal of value. Relailers intermediaries wholeselers distributors dealers. In deciding the role of pricing in the marketing strategy you must evaluate the importance of prices to competitive positioning, probable customer reaction, financial requirements, and relationships in the marketing mix.
Before we decide on our pricing strategy it becomes necessary to be aware of certain realities in the background…..inflation and the weekened rupee…you can see the inflation trends and notice that it’s the food inflation that has been major contributor to our inflation problems…concern for company like nestle…and if you see the commodity basket of nestle the progress of inflation has ben persistent The term market basket or commodity bundle refers to a fixed list of items used specifically to track the progress of inflation in an economy or specific market.
There is another interesting pattern to observe…income pyramid moving from triangle to diamond…deprived india has been narrowing and we are moving towards an inclusive growth…income is getting equally distributed across income tiers…
This slide shows nestle’s Multi-tier strategy with right product portfolio…. You can relate it to the income pyramid Premium-being ofinterest only to a very specific subset of the public….favourable perceptions solely based on price. Value creation is the primary objective of any business entity. It is obvious that most successful organisations understand that the purpose of any business is to create value for its customers, employees, investors as well as its shareholders. Emerging markets and positioning of the products(Product positioning is the process marketers use to determine how to best communicate their products' attributes to their target customers based on customer needs, competitive pressures, available communication channels and carefully crafted key messages.)…. Premiumisation- for a certain section but then it plays with the consumer psychology…Premium pricing (also called image pricing or prestige pricing) is the practice of keeping the price of a product or service artificially high in order to encourage favorable perceptions among buyers, based solely on the price. 'PRODUCT PORTFOLIO' The collection of different items a company sells. Within the product portfolio, each item typically makes different contributions to the company’s bottom line. Some products cost more to produce, some are increasing their market share (or losing market share) at a faster rate, some bring in more revenue and some have greater marketing expenses. PPP-pecific business model called “Popularly Positioned Products” (PPPs) which focuses on the specific needs….clearly gives you the value for money...where you have those quantity discounts…. Products and services which are readily available to and appealing to the general public, as opposed to being ofinterest only to a very specific subset of the public.
Skimming strategy-clear leader…this is because the product quality is good enough and a bit of skimming price will not cause the customer to switch brands. Price skimming is a pricing strategy in which a marketer sets a relatively high price for a product or service at first, then lowers theprice over time. Price-Adjustment Strategies refers to allthose strategies which are applied by anorganisation to take into consideration thedifferences among the customers andrapidly changing environment. Price Leadership' When a firm that is the leader in its sector determines the price of goods or services. Price leadership can leave the leader's rivals with little choice but to follow its lead and match these prices if they are to hold onto their market share. Price flexibility-Method of selling where the prices are open to negotiationsbetween buyers and sellers, and allow for bargaining within a certain range.-in institutional business…. Market entry strategy: Nescafe is using marketing Skimming strategy when they enter into the market in a country, because at that time they believe that their target customer for coffee belonged to upper class, after that with the success of this strategy they reduce their prices and target the upper middle class, but that strategy doesn’t form into penetration. Pricing strategy for establishing products: For Nescafe, the focus is focus on the maintaining prices because in circumstances where a price change may be desirable, but the magnitude of change is undeterminable. It is found the competitors of Nescafe are very week in terms of having market share, so it give company a edge on competitors to maintain prices while introducing new product. Price leadership strategy: Nescafe is at the moment having a price leadership strategy and it is because it fulfills all the requirements of a successful price leadership. Flexibility in pricing strategy: They have flexibility in their pricing strategy but only for the Institutional businesses, otherwise they stick on with same prices in market. And this is because their competitors are not powerful and not in a position to dictate Nescafe to create flexibility in pricing. 3. Product Mix Pricing Strategy Product line pricing strategy; Nescafe has a full line of instant coffe products and because of differences in customer perceptions of the value of different features, they use product line pricing strategy. Each of Nescafe Classic, Nescafe 3in1, Nescafe Gold etc. Has different price in different sizes. 4. Price Adjustment Strategy Geographical pricing; different prices for customers located in different part of the World.
Valued as snack not as meal, Survival objective – Price is kept constant so it is affordable by all On markets the consumers usually "pull" the goods or information they demand for their needs, while the offerers or suppliers"push" them toward the consumers Higher margin being a clear leader Penetration pricing is a pricing strategy where the price of a product is initially set low to rapidly reach a wide fraction of the market and initiate word of mouth.[1] The strategy works on the expectation that customers will switch to the new brand because of the lower price. Penetration pricing is most commonly associated with marketing objectives of enlarging market share and exploiting economies of scale or experience.[ The strength of pricing…. For Nescafe as well as Maggi, Nestle offers a lot of sizes and package options…. In supermarkets, you can even find a 16 packet maggi whereas in small retail shops, you can find 5 rs maggi.
Kitkat and Munch, due to tough competition from other companies, Nestle offers competitive pricing. You will find that nestle will be similar priced to many of Cadbury’s Products in the chocolate segment. Seasonal price variation by upsizing at the same price or reducing the sale price
Mark up pricing Cost of production of good plus a profit Product quality create value perception of the buyers Price of the product is very high due to the good quality of the product Quantity discount

Nestle pricing strategy

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Nestle pricing strategy

Editor's Notes