ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD

(Department of Business Administration)

Course: Strategic Marketing (8537)

Semester: Autumn 2016

Level: MBA (2.5 Years / 3.5 Years)

Topic 1

Developing Promotional Campaign for Services

 Acknowledgements

In the name of Almighty Allah, the most gracious, the most beneficent by help of whom I am
able to complete my internship report. I am grateful to Allah almighty, for enabling me to fulfill
this tiring, but interesting job for the completion of my assignment.

No doubt Allah is the main source of knowledge and wisdom. It is a great blessing of Almighty
Allah, that He enables me because of His Holy Prophet (peace is upon him) I am presenting my
humble contribution for distribution of knowledge. I bow my head before Almighty Allah who
gave me courage, knowledge and confidence and to carry on assignment and enabled me to
accomplish it.

I would not be going to do justice in presenting this assignment without mentioning the people
around me who have been inextricably related with the completion of this assignment. I would
like to express my heartfelt thanks to our course teacher for his support and guidance, which he
rendered throughout the study to peruse this assignment. Finally, for any all too fallible errors,
omissions and shortcomings in the writing of the report only I am responsible for which we
hope that all concerning regards of this assignment will forgive us.
 An abstract

Promotional campaign is a series of advertisements using various marketing tools that share the
same message and ideas to promote a business or event to a target audience. The typical
campaign uses different media resources including internet, newspapers, television, radio, and
print advertising.
Promotional campaigns may seem like nothing more than a mechanism for reaching an
audience through different means, but to do so effectively, these campaigns must be built on a
solid foundation with various crucial elements at their core. Before the gimmicks, social
media buzz or giveaways, specific goals must be defined which the campaign must be designed
to reach. These campaign goals should meet the specific needs lacking within the area targeted
by the campaign’s marketing plan. The most basic goals to be met include the increase of both
sales and awareness of a new product to the audience. Other purposes for a campaign can
include increasing exposure, promoting a new angle of an existing product or service, or
changing current stereotypes of, or prejudices toward, a product already available in the
market.
 Table of contents

Acknowledgements.....................................................................................................................................2

An abstract..................................................................................................................................................3

Table of contents.........................................................................................................................................4

1. Introduction.........................................................................................................................................5

2. Practical study of the organization......................................................................................................6

3. Data collection methods......................................................................................................................8

4. SWOT Analysis.....................................................................................................................................9

5. Conclusion and Recommendations...................................................................................................10

6. References.........................................................................................................................................11
 1. Introduction

Promotional campaign is a series of advertisements using various marketing tools that share the
same message and ideas to promote a business or event to a target audience. The typical
campaign uses different media resources including internet, newspapers, television, radio, and
print advertising.
Promotional campaigns may seem like nothing more than a mechanism for reaching an
audience through different means, but to do so effectively, these campaigns must be built on a
solid foundation with various crucial elements at their core. Before the gimmicks, social
media buzz or giveaways, specific goals must be defined which the campaign must be designed
to reach. These campaign goals should meet the specific needs lacking within the area targeted
by the campaign’s marketing plan. The most basic goals to be met include the increase of both
sales and awareness of a new product to the audience. Other purposes for a campaign can
include increasing exposure, promoting a new angle of an existing product or service, or
changing current stereotypes of, or prejudices toward, a product already available in the
market.

Of the many promotions launched yearly, very few actually leave a lasting impression on the
intended audience. Whether it be a promotion centered around bringing the product closer to
the user by direct exposure or a campaign fueled by a large social media following, it must be
unique. Potential customers are exposed to many campaigns on a daily basis, most of which go
unnoticed or, if peripherally noticed, forgotten. To be functional and noticeable, promotions
must be unique in the way they entice the audience to engage. The closer a brand can get to a
customer, the more likely it is to be remembered.

Many campaigns start off with the intention of highlighting a specific product or service but
wind up getting swept away when the emphasis is placed on the wrong aspect of the
promotion. Characters, tag lines, and jingles can be a great way to help the audience remember
a product; however problems can arise when that promotional element takes center stage,
overshadowing the product itself. The tool used to promote must always tie back to the item to
be showcased.

Achieving positive results is undoubtedly the goal of any campaign. Although the campaign may
be comprised of many elements, the end result must demonstrate that goals were met and
improvements were made. Increased product awareness, product sales and product exposure
are some of the prime objectives that many campaigns are designed to achieve, and these must
be measured and quantified post-campaign to show actual success.
 2. Practical study of the organization

Nestle is one of the major food and beverages company in the world. It was established in 1867
by Henry Nestle, who was a trained pharmacist. The introduction of the company in the market
was through the development of an alternative source of infant nutrition for mothers who were
unable to breast feed and named it as Farine Lactee Nestle. He chose his surname 'Nestle'
which means a 'little nest' for his company's name logo.

In 1904 Nestle introduced its chocolates in the market. But when the availability of raw
materials reduced during the First World War, Nestle purchased lot of factories in U.S and
increased their production to twice as their pre-war production. Immediately, after the end of
the war consumers switched back their choice to fresh milk due to which Nestle recorded its
first loss. However they streamlined their operations and brought production in line with sales
and thereby dropping the debts.

The 1930's saw Nestle introducing several new products like Milo and Nescafe. Nestle achieved
considerable growth after the end of Second World War because of diversification within the
food sector. The sales of Nescafe instant coffee quadrupled between 1960 and 1974.

In 1980's Nestle drew flak from many organizations on account of promotion of infant formula
over breast feeding which allegedly led to death of infants in less developed countries. The
boycott of Nestle products was suspended in 1984 after Nestle agreed to comply with the
international code.

Developing Promotional Campaign

Stanton and Futrell (1987:418), describe promotion as an important element of marketing mix
which aims in informing and persuading the market about the products and services of the
company.
According to Baker (1999, 310) the method of communicating the product offer which is made
by a company to match the needs of the customers and to persuade them to try the product is
Promotion. They feel that the significance of promotion increases when the distance between
the producers and customers increase and as the number of customers increase. Promotion
activity does not depend on the demand; even if the demand is high promotional activities
should go on in order to keep the manufacturers name before the customers.

Nestle uses promotion as one of the major source to reach their customers to make them
aware of the different products introduced in the market and the value of the products
introduced.

Promotion Mix according to Armstrong and Kotler (2001:387) also called as marketing
communication mix consists of all the promotion tools in a perfect blend which an organisation
uses to promote its products.

Nestle adopts a promotion mix with a perfect blend of several different promotion tools to
promote the value of its product and make the customers aware of their different products.

Promotion Tools

PERSONAL SELLING:

According to Stanton and Futrell (1987: 418), personal selling is mainly used when the market is
geographically concentrated (Few customers) and when the products are custom made. It is
defined as a face to face communication with buyers in the aim of pursuing the customers to
purchase by Simon(). It's a one to one marketing. Tele marketing, door drops inserts, Door to
door selling are all techniques used in personal selling.

ADVERTISING:

Advertising according to Groucutt (2005:215) is to communicate to a specific audience to

stimulate action and its success is in the way the right information reaches the right person at
the right time. Majaro (1993) say that advertising is any paid form f non-personal
communication of products, services or ideas through a commercial media. (Stanton and
Futrell, 1987) Promotion through advertising is mainly done when the market is geographically
dispersed or when the product is standardized.

Nestle advertisements are well known in the market and they have made sure that the
advertisements are attractive through all the possible media. Internet is one of the latest media
used by nestle to promote their products, where they have different websites hosted for
different products. Different strategies for each product like online competitions and
distribution.
Tim Ambler and Demetrios Vakratsas have formulated a framework for studying how
advertising works for a company.

They have considered the input to be advertising own and competitive brands. Scheduling the
media and message contents are the motivation factors or triggers the consumer's response.
"Cognition, the 'thinking' dimension of a person's response, and affect, the 'feeling' dimension,
are portrayed as two major intermediate advertising effects" (Ambler, Vakratsas, 1999:26)

SALES PROMOTION:

Sales promotion represents non- media campaigns such as sampling displays, shows,
exhibitions and contests (Majaro, 1993:35). Stanton and Futrell (1987:418) believes that sales
promotions one of the fastest growing promotional methods these days. Free samples, Money
off coupons, extra value offers buy one get one free, bundling, privilege points are all different
methods used in sales promotion. Nestle also uses sales promotion as one of their promotion
tools by offering programmes like every day eating coupon codes and discounts and offers for
online shopping on nestle products.

PUBLICITY:

Publicity is a promotional method where the organisation is not paying for the communication
about its products and is benefiting from it (Stanton and Futrell 1987:419). This occurs either
through a non-personal news story appearing in a mass medium or is delivered by a person in
an interview or a speech. Publicity is achieved mainly through public relations activities.
According to Jobber (2007) sponsorship provides more opportunities for publicity in the media.

Nestle is a well known brand in the market and its fame describes its publicity and the further
publicity occurs during various interviews of officials of nestle. Publicity for nestle also occurs
during the launch of every new products and when the annual sale reports are published. This
publicity obtained by nestle is not by paying any of the media.

PUBLIC RELATIONS: According to Groucutt (2005:224) public relations is a means of

communication used by organisations to deal directly with the customers and vice versa. There
are different departments in organisations which deal with all issues or concerns of the
company with any other organisation or individuals.

Nestle, public relation activities is evident from how they try to communicate with government
organisations as well as the customers about the different issues that they face. Through public
relations nestle try to bring to the attention of all the customers and organisations concerned
about the various issues or concerns and the current approach they are taking towards these
concerns.
 3. Data collection methods

Secondary data analysis is the analysis of data collected by another researcher or organization
in order to discuss or explore an issue (Hakim; 1989). Secondary data can helps to define the
research problems and can develop an approach, it is easy and quicker to access mostly
through university's library facilities as this data already been collected and published. This data
can be collected in short space of time and it is cost effective. For this research work I will be
using the journals, books, library resources and online databases to collect the data.

Primary data is normally regarded as being data which is collected by the original researcher
who is using the data for further investigation (Oliver; 2002 p.14. For this research it is
appropriate to use both techniques for data collection. Thus the study will employ primary data
as well as secondary data therefore I selected a mixed method approach

4. SWOT Analysis

Strengths

Strengths are the skills and capabilities possessed by the organization which has a positive
impact on the successful implementation of a competitive strategy. The factors such as the
company's market dominance, the financial performance, production facilities and capacity,
human resources, reputation of any particular brand etc. constitute the strengths of the
organization.

Strength of Nestle is the presence of its factories or operations in almost every country in the
world employing around 283000 people. The sales values have touched CHF 109.9 billion, with
a net profit of CHF 18.0 billion

Nestle has recorded a financial growth even in times of recession by promoting the sales of
smaller and cheaper versions of products in developing economies.

Weaknesses
Weaknesses are the elements within the organization that hinder or have a negative impact on
the successful implementation of a competitive strategy. It may include the inadequacy in
financial resources, marketing skills or capabilities in relation to the competition.

Nestle do not have direct market outlets and this can be one of the weakness as it can cause
difference in profit made. Their another weakness is not having enough raw material
production units, they depend on either local raw material producers or through other trade
channels.

Opportunities

Opportunities are the favourable conditions existing in the market environment which can be
exploited by the organization to generate a better performance. Opportunities may be social,
economic, political, environmental and demographic.

Nestle's weakness of not having a direct outlet can be converted as an opportunity by

introduction of new direct outlets. The acquisition of Cadburys for an example is an opportunity
since they are one of the main competitors for Nestle. Setting up their own farms and raw
material production units is an opportunity as it would reduce the cost for Nestle.

By Acquisitions nestle can enter the new market, which is easy through already existing
companies. Nestle has great opportunities in a society which is becoming more and more
health conscious.

Threats

"A threat is a challenge posed by an unfavourable trend or development that would lead, in the
absence of defensive marketing action, to lower the sales or profit of the organization".

Their weakness of not having enough raw material production units (which cause them to
depend on other producers) and their dependency on other producers can threaten to reduce
the quality of products they offer. The contamination of food products is a major threat to
Nestle in the market.

Intense competition in its market segments also possesses a major challenge to Nestle as its
competitors are also trying to increasing their product ranges which might make inroads into
Nestlé's profit.

Another threat to Nestle can be the maturity of the markets which they are entering n. For
example, in France, Danone has already established itself as a market leader in case of yogurt
before Nestle launched its LC-1 division in France and could not compete against the well
established Danone.
The consumers frequently tend to change their preference of brands, so change in consumer
trends is a threat to Nestle.

5. Conclusion and Recommendations

Nestle is one of the leading company in food industry. They have a variety of successful
products that is segmented into food and beverage industry. Their promotional campaigns and
way of innovative thinking and quality of the products made them a market leader in particular
sector.

Nestle has drawn flak for its unethical marketing practices in the case of baby food in
developing countries by advertising that the infant formula was superior than mother's milk
which has diminished the brand image of the company. Hence it must be ensured that such
acts are not repeated and measures must be taken to improve its brand image. They can utilize
the social media as a catalyst for this change.

Nestlé's chilled dairy sector has been classified as unsatisfactory by the company itself.
In order to resurrect it, they can opt for more acquisitions or joint ventures with the major
players in the market.

The cost of raw materials has been on a rise over the past few years which have caused an
increase in the production costs. Acquiring local farms for their raw materials will reduce their
production cost and hence they can improve their profit.

Educating the consumers through campaigning is a possible way to grow their business. As
Nestle is producing health conscious food products, they can use the packaging as a means to
describe the nutrition benefits of their products.

Currently, Nestle sells its products through wholesalers and retailers. Nestle can improve its
profit margin further by establishing their own retail outlets

Monitoring and evaluating their products and market continuously gives them a clear vision of
their market position and it will helps them to shape a proper competition to take advantage
over their competitors and also to set up a better brand image.
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