An Analysis on Situation and Marketing Strategy Proposal to Maintain Brand Equity and Expand Brand Penetration of Nestle Products in Ghana, West Africa” “How to effectively expand market in least developing countries” is the major issue found in the case. This consists of derived issues faced by the company which can be correlated with marketing studies.
By The American Marketing Association, marketing is defined as the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners and society at large. 1 This report conveys marketing problems evaluated as well as recommendations to answer. The first marketing issue in this case is determining the best strategies in penetrating market based on the situation in Ghana.
Beside the unstable condition in the country, Nestle also faced immense competition with rival cocoa-drink manufactures such as Cadbury, Cocoa Processing Company and NABB Brothers. Therefore, to sustain and grow the business, the company needs to establish a clear innovative marketing and road to market strategy. This strategy should address the company’s objective in term of distribution expansion, competitor rivalry as well as to maintain profit margin. Nestle may consider implementing the following marketing strategies:
Management Control – with the managing director, director of marketing, sales manager and plant engineer positions being filled by white expatriates, the company should be more effective in controlling its activities and business processes in Ghana. 2) Increase in Market Share can be achieved by increasing the quality. The Management might need to conduct market surveys, as well as improve the level of promotion and marketing. 3) Product Analysis – As a leading brand in premium segment, Nestle should create good customer satisfaction and retention as if their products are close to customers’ lives.
This can be done by improving packaging and maintaining product quality. 4) Promotional Analysis – Since most Ghanaian is in contact with radio between working hours or during the daytime, personal selling which is similar to advertising, sales promotion and sponsorships could also be introduced during the early stages of creating brand awareness. 2 With precarious economic condition in which the World Bank had to provide financial assistance for Ghana and where the consumer price continued to rise in line with inflation rate, Nestle should be able to create good image branding to attract more customers.
It should be able to convince customers that they have the required nutrients for kids’ growth as primary foods alone was not enough. Products of Nestle were complementary food products and in unstable conditions like that, people tended to prioritize the fulfillment of primary need. Thus, the group of customer that should get further approach is mothers as they have the purchasing power, as well as children who can be approached through campaign or promotion at schools. Again, quality assurance should be there because if customers are attracted to the quality, they would buy the products whether or not they need it.
Water issue in Ghana should also be taken into consideration. Only 39% of its rural population had access to safe water and this was a great challenge for Nestle since the majority of people lived in rural areas. The Nestle products were served with clean, safe water. Therefore, the availability of safe water in the country should be ensured to make the business sustainable, or else, the Ghanaian would not buy brewed beverages. The US-based Pacific Institute reported that fast growing world population, globalization, and water shortage have caused more risk on business as there is no substitute for water.
Thus, Nestle may consider diversifying its business to product that doesn’t require water for serving, or ready-to-drink beverages. Another issue faced by Nestle is the high production cost. Despite the satisfying financial performance with annual growth of 12% which was more than expected, its financial report showed the great distance between sales and profit. Beside raw materials, tin for making the containers for Milo was a major cost component in the production process. In responding to this, consideration was being given to the introduction of a 200 gram soft plastic pack.
Nestle can also use pouch instead of tins, to reduce the cost as well as to be environmentally friendly. As for the long term recommendations, Nestle may consider making decentralized approach through adapting to local taste. Nestle Ghana should create a good relationship with the popular press and other media in order to help them communicate message to customers, the general public, and government regulator. For example, a tactical consideration on media planning an analysis can be made through radio and television, satellite and cable TV, direct mail the internet and other media.
The execution of these campaign can be managed by advertising agencies throughout local agency, company owned agency and multinational agency with local branches. 5 On the other hand, to focus the wide spread of the product, in the coming years Nestle is advised to be able to set up a clear route to market plan and divide the team to focus on each retail channel either modern trade and traditional trade. The company also needs to develop clear rules and regulations to help settle distributor rivalry.