Sales Proposal NESTLE - Essay Example

? Sales Proposal - Nestle AFFILIATION: Sales Proposal - Nestle Brief Overview of the product In order to provide superior quality cold coffee at the leading ice cream parlor ‘Ben & Jerry’s’, Nestle will offer its exclusive recipe to the brand so that it can enter in this market successfully. This is a unique and big step taken by Nestle because usually organizations do not disclose their secret recipes to other firms. When people go to these ice cream parlors, the coffee lovers are looking for an excellent and delightful cold coffee that can enhance their coffee experience. Nesextravaganza is the name of the cold coffee that will be offered by Nestle at all of the parlors’ outlets so that everyone around the country can try it out. It has a huge range of direct and indirect competitors as it is competing with many brands in each of its product category. As the competition is at its peak, Nestle has to work upon differentiation strategies to deal with their customers and also ensure that they maintain their customer base in the market. Associating the brand name with an ice cream parlor is a unique and creative idea as well because many organizations are not observed to take such a step. However, for the cold coffee, it is in direct competition with Starbucks, Gelato Affairs, Movenpick and all other coffee shops ice cream parlors that are offering cold coffees. In the initial phase, the company has decided to introduce three unique flavors in cold coffee; one will be simple but strong cold coffee, second option will be caramel flavored cold coffee and third will be the chocolate flavored cold coffee. Since Ben & Jerry’s has seen a robust growth in the demand of cold coffee at its coffee parlors, it has to include this product in its menu list so that it can enter into the coffee market like Gelato Affairs has done. All organizations need to move ahead in the competition with the business requirements, ignoring any competitive move would prove to be consequential for the firm. At it already has a huge range of flavors in the ice cream category, it has the potential of offering various other options in cold coffee in the long-run which can enhance the experience of its customers to a great extent. Nestle has carried out the market survey and it is concluded in the study that the customers are willing to pay premium prices for having an excellent cold coffee at the ice cream parlors. The respondents have emphasized in the survey that they would love to have a chilled glass of cold coffee at Ben & Jerry’s which is has been ranked at the top level by the customers. It was even revealed that the target market prefers to visit this parlor once a week with their friends as it is their favorite place for hangout. The product ‘Nesextravaganza’ has a huge market potential and it can achieve its objective of gaining the top market share in the cold coffee sector in the ice cream parlors. Nestle Nestle’s history dates back to 1866 when it started its operations in Cham, Switzerland by the name ‘Anglo-Swiss Condensed Milk Company’. At that time, it was the foremost European company that was producing condensed milk for the customers. In 1905, the company merged with Nestle as a result of fierce competition within the industry and since then it has been dominating the confectionaries and coffee industries (“Nestle History”, 2013). The leading brands of Nestle are Nestle Pure Life, Nesquik, Nescafe, Nestle, Haagen-Dazs, Maggi, Milo, Nido, Nestle Milkpak and many more. As of 2012, the company had net profit of $ 10,611 million which is consistent with its 5% yearly growth rate despite the economic recession that is impacting the businesses globally (“Nestle Key Figures”, 2013). The primary objectives of the company are to be known worldwide as the leading corporation that fosters Nutrition, Wellness and Nutrition, gain trust of all the stakeholders and enhance the financial performance of the entire industry. It is common and well known fact that majority of the consumers want to have a healthy lifestyle with full nutrition in their diet. Nestle has made its brand image linked with nutrition and a healthy lifestyle for the consumers. In order to gain the trust of the stakeholders, the company continuously strives to fulfill its promise of delivering exceptionally high quality products and ensuring that the offerings are made in accordance to the environmental sustainability criterion. The corporate ambition is evident from its tagline ‘Good Food, Good Life’ (“Nestle Strategy”, 2013). Nestle has an extraordinary competitive advantage because of the following key elements: 1. An excellent and diversified portfolio of brands. The diversified portfolio allows it to increase its customer base which in turn increases the profitability of the firm. Business risk is also diversified when the organization has a diversified brand portfolio. 2. Excellence in Research and Development (R&D) capabilities. Research and development is an important element and it is becoming vital for all organizations to invest generously in this department as the research allows one to know the customer demands. Research and development allows new market opportunities to be explored and catered accordingly by the organization. 3. Global presence across the world. The world is considered as a global village nowadays and hence it is imperative on all organizations to ensure that they have a global presence to depict the credibility of the firm. It is important for organizations to have an online presence so that the information about the organization can easily be gained from the websites along with the products offered by the organization. 4. A loyal and dedicated workforce that is integral with its friendly corporate culture. A dedicated workforce ensures that the goals and objectives of the organization are met successfully. The personal goals of the employees are aligned with the organizational goals by a dedicated and loyal workforce and this proves to be highly beneficial for the firm. 5. A competent value chain that is hard to copy by the competitors. Value chain activities should be conducted properly and also in an expert manner so that the organization can gain a strong competitive advantage in this area. 6. Strong values of integrity, trust and social responsibility are embedded within its business operations. Since it has successfully entered in all the vital areas of the confectionary and coffee industry, it can strengthen its image further by penetrating into cold coffee subdivision by entering into alliance with Ben & Jerry’s. Ben & Jerry’s Ben & Jerry’s was founded by Ben Cohen and Jerry Greenfield in 1978 in the form of a small ice cream parlor in Burlington, Vermont. Initially, it was a small shop that promoted the idea of homemade ice creams which were made from natural ingredients. The founders ensured that adequate attention was given to the making of the confectionary item by employing the utilization of top quality equipment and tools. Using high quality resources for conducting business operations gives the desired successful results for the organization. The competitive edge of this ice cream was that it was loaded with a wide range of chunks such as nuts, candies, cookies and fruits. At that time, the manufacturers of ice creams had limited their focus on the flavors and were not emphasizing on adding toppings and other ingredients on it. Currently, it is presenting the customers with a complete range of ice cream and frozen yoghurts so that it can successfully cater to the needs of those people who are looking for divine indulgence of sweetness. It has an advantage of being in the sweet market and hence knows the customer's taste and preferences regarding the various ice cream flavors. A differentiation in the ice cream parlor would not be a difficult task for the outlet to handle. It has ensured that everyone can have access to its offerings by making it widely available at all the well-known retail stores, supermarkets and hypermarkets (“Our History”, 2013). Since it has started offering smoothies, coffee and sundaes, it has not even initiated cold coffee for its customers. With the help of Nestle’s latest product, ‘Nesextravaganza’, the brand can effectively fulfill the coffee lovers’ desire. The brand would be able to attract the market of coffee lovers which will boost its sales and profitability on the whole. Target Market Profile Nestle has already conducted preliminary analysis of the market to identify the potential of the unique product that it will be offering to its customers. There are many coffee lovers in all age groups and hence a proper research would present a clear picture. Initially, the target market comprised of teenagers who love to try out new things and they are willing to consume huge amount of coffee especially during their examination time period. But after the survey and test marketing, it was found that the college going and professionals have more desire for cold coffee and even older people visit the ice cream parlors to have a glass of cold coffee. This was an unexpected and interesting result because the usual assumptions is that students go for coffee to stay awake and study longer. During the initial phases of the launch, the company will try to provide the customers with all the three varieties in its outlets that are present in US. Once the product will be successfully accepted by the market, then it will be available in other regions across the globe. In order to provide a clear understanding about the target market, the profile has been developed so that there is clarity about the characteristics of a Nesextravaganza buyer: Gender: Male and Female Age: 16-40 years Lifestyle: Adventurous, fun-loving, sophisticated, elegant and experimental Occupation: College or university students, part-time employees and professionals Income Level: $20,000 - $50,000 per year After two years, the company plans to offer this product in the form of cans in all the leading superstores and retail stores so that the customers can keep a certain amount of cold coffee in the form of stock and consume it whenever they desire. At the same time, Ben & Jerry’s will start offering home delivery service so that the customers can have access to their favorite coffee with their preferred toppings so that they can enjoy the sensational cold coffee right at their home with their friends and family members. The price range offered to the customers is slightly higher so that they can get value for their money. In order to create awareness about the latest offering, the buyers will be informed by displaying the advertisements on the billboards and in the leading newspapers. In all of the promotional mediums, the key factors that will be highlighted will be natural and will depict superior quality ingredients used in the coffee making process along with the secret recipe by the experts of the company. Financial Projections Assumptions 1. The initial financing of $25,000 will be done by Johanna Smith (Marketing director on behalf of the company). 2. The website management will be outsourced and it will have an yearly cost that will even include up gradation of the website content and advertising on online mediums such as social networking sites. 3. The cost of advertisement will be financed from the company’s account and every employee will be given salary on a monthly basis. Financial objectives 1. To increase the company’s sales by 10% in the next three years. 2. To cut the advertising cost by 5% in the next year. 3. To avail other investment opportunities for ensuring that sufficient funds are available for the business operations. The detailed break-down of the company’s cost structure for this product is shown in the appendices. Sales Support Package For the last few years, Nestle has been facing problems with some of its products as it had to recall them from the market. The key issues that have impacted the brand equity are detection of melamine in Chinese milk, violation of the child labor laws, greenwashing, scandal of horsemeat, presence of E.coli in cookies and usage of palm oil. In order to reinforce its strong brand image, Nestle is undertaking huge number of Corporate Social Responsibility activities. The main aim of these CSR initiatives is to shed light on the company’s interest and concern of its social responsibility for the enhancement of the community (Lambert, 2010). The sales team of the company will ensure that two of its representatives are present at each outlet of Ben & Jerry’s so that they can induce the customers in trying out the latest offering of the brand. In case, any customer is dissatisfied with the cold coffee, it will be eventually replaced with the new order so that the customer is satisfied with the product. The sales representatives have to ensure that they provide the customers with their desired requirements by giving utmost attention to their specifications so that they are happy after their purchase (Danaher & Rossiter, 2010). When the customers will be pleased then there stands a good chance that the customers may make repeat purchases from the outlets. Sales Team structure In order to make sure that the desired sales targets are achieved, the sales team structure will comprise of three crucial divisions i.e. sales manager, sales analysts and sales personnel. There will be one sales manager who will be responsible for evaluation of the performance of the sales team and will ensure that weekly reports are made regarding the sales of the company’s products specially Nesextravaganza. The sales analyst area will comprise of two experts who have the ability of critically analyzing the factors that can impact the performance of the offering. The key areas of concern comprise of both external and internal characteristics of the business environment (Danaher & Rossiter, 2010). Among the major factors impacting the sales of Extravaganza are quality of cold coffee, satisfaction level of customers, moves of the competitors, continuity of alliance with Ben & Jerry’s and availability of the ingredients of the cold coffee. The analysts will ensure that everything is well-coordinated and there is adequate supply of ingredients on all of the outlets. They will even keep record of any complaints received from the customers and ensure that the pitfalls are avoided in the future business plans. The sales personnel will be trained by these analysts so that they can develop the skills required for remaining competent and have the capability of judging the requirements of the customers. Finally, the sales personnel will be the main people who will be in direct contact with the customers. Each outlet of the ice cream parlor will have two of the sales representatives so that they can present the customers with their desired coffee quickly and with perfection. On a daily basis, each sales personnel will have to give a report to the analyst about their work log so that the analysts can review the effectiveness of the new offering in the market. These personnel will be recommended to make suggestions about enhancement of the offering so that the product can be modified and altered to be compatible with the target market level of coffee desire. Future Outlook for the product Since there is no direct competition from any of its competitors i.e. Unilever, Mars International and Kraft Foods, there are high chances that the unique product is able to capture the desired market share. The sales team will ensure that the competitor moves and market dynamics are carefully monitored so that any deviation from the targeted results are promptly addressed and resolved. Presently, Nesextravaganza appears to have a strong brand that will be able to meet the demands of the customers effectively. However, Nestle will ensure that it remains alert about the latest offerings of its competitors so that it can take timely action. Since the product is of a new kind in the coffee industry and ice cream parlor sector, it is possible that the brand is able to create a distinctive image in the industry and enhance its brand presence effectively. Conclusion By developing a sales proposal, the organization gets to know the direction and also the strategies that should be implied to increase the sales and profitability of the firm. Nestle can definitely strengthen its presence in the market by entering this new segment which is still unexploited by its competitors. This is going to be a good strategic move by Nestle an it will allow the product to be appreciated by many customers. In order to make sure that its brand equity is further enhanced, the brand will have to meet the demands of the customers at an exceptionally high level. The coffee quality and flavor should be made according to the taste and requirements of the customers. Different flavors should be available as come customers may require different flavors of coffee. For promoting the sales of any new brand, the organization needs to concentrate on the important factors such as attracting more customers through advertising and promotion. The advertising should be done in such a way so that the potential target market views the advertisement and the offer and plans to try out the coffee. Nestle and Ben and Jerry's outlet, both can contribute towards the marketing and promotion activities of the new coffee. The sales team of the company has been developed in accordance to the requirements of the new product so that all potential risks are adequately tackled and all obstacles are effectively removed. Initially, the outlet may have to make a lot of efforts in creating awareness about the brand but once it is running it will be able to increase sales via the good quality of the coffee and also by meeting the demands of the customers. With proper implementation of all the vital aspects of the brand, Nesextravaganza will be able to satisfy the customers’ needs at an extraordinary level of excellence. For the customers, the coffee at the outlet would be a new experience and they would enjoy it as well. References Danaher, P.J., & Rossiter, J.R. (2011). Comparing perceptions of marketing communication channels. European Journal of Marketing, 45(1/2), 2-46. Lambert, D.M. (2010). Customer relationship management as a business process. Journal of Business & Industrial Marketing, 25(1), 4-17. Nestle History. (2013). Retrieved April 10, 2013 from http://www.nestle.com/aboutus/history Nestle Key Figures. (2013). Retrieved April 10, 2013 from http://www.nestle.com/aboutus/keyfigures Nestle Strategy. (2013). Retrieved April 10, 2013 from http://www.nestle.com/aboutus/strategy Our History. (2013). Retrieved April 10, 2013 from http://www.benjerry.com/company/history Appendix I – Start up costs Appendix II – Balance Sheet Forecast Appendix III – Income Statement Forecast Appendix IV – Cash Flow Forecast Read More