Sales Promotion is a most commonly used phenomenon in today’sbusiness world. It’s two way benefit is that it helps to increasesales as well as it increases customer loyalty. So most of thebusiness firms consider it as an important marketing tools. NestleBangladesh Limited is food and beverage manufacturer. It is thesubsidiary of it’s mother company world’s largest food andbeverage manufacturer Nestle S. A. Before going to thediscussion of sales promotion in Nestle Bangladesh Limited wewill first know the company. About Nestle
Nestle is the world’s largest food group not only in terms of itssales but also in terms of its product range and its geographicalpresence. Nestle covers nearly every field of nutrition: infantformula, milk products, chocolate and confectionery, instantcoffee, ice-cream, culinary products, frozen ready-made meals,mineral water etc. They are also a major producer of pet food. Inmost of these product groups and in most markets, Nestle is theleader or at least a strong number two. Nestle is a very focusedCompany, with more than 94 percent of the sales coming fromthe food and beverage sector.
Nestle is present around the globe,on all continents, with around 230,000 people working in more inan 84 countries with 466 factories and with sales representativesin at least another 70 countries. Many of its brand names areworld familiar: Nescafe, Nido, Maggi, Polo, Smarties, Milo, Perrier,Friskies, KitKat, Crunch…. Some of its products have brokenrecords: 3,000 cups of Nescafe are consumed every second. andKitKat merited an entry in the Guinness Book of World Records asthe world’s best-selling chocolate bar with 418 KitKat fingerseaten every second around the world! Key Information About Nestle S.
A. World’s Largest food Company Founder: John Heinrich Nestle in the year of 1967 Present in all countries Tk. 7,000,00 Crore sales in 2008. Over 280,000 employees 456 factories in 84 countries Core Brands Nestle Bangladesh Limited Nestle Bangladesh Limited started its first commercial productionin Bangladesh in 1994. In 1998. Nestle Bangladesh’s vision is tobe recognized as the most successful food and drink Company inBangladesh, generating sustainable, profitable growth andcontinuously improving results to the benefit of shareholders andemployees.
The factory is situated at Sripur, 55 km north of Dhaka, thefactory produces instant noodles, cereals and repacks milks,soups, beverages and infant nutrition products. Today Nestle Bangladesh Ltd. is a strongly positionedorganization. The Company will continue to grow through thepolicy of constant innovation and renovation, concentrating on itscore competencies and their commitment to high quality, with theaim of providing the best quality food to the people of Bangladesh. First commercial production start from 1994. Total Employee 437 nos 60 Core taka sales in 2008 Total # of Distributor 78 Total # of Outlet 100000+ Core Brands In Bangladesh: Nestle Bangladesh Limited divides its core brands into twocategories: Infant category Lactogen Cerelac Food and Beverage category Nido Maggi Nescafe Sales Promotion Sales promotion is the activity that provides special incentives tobring about immediate response from consumers, distributors andorganization’s sales force. Sales promotion activities can be divided into two broadcategories: consumer promotions and trade promotions.
Consumer promotions refer to those activities that are designedto stimulate consumer purchase, in effect to help pull the product through the distribution channel. Common type of consumer promotion activities include coupons, free sample offers, contests,cash-back offers, and a variety of frequent buyer programs. Tradepromotions refer to those activities designed to encouragedistributors to purchase additional volume and provide additionalsupport to stimulate consumer purchase. In effect, tradepromotions help push the product through the distributionchannel.
Common types of trade promotion activities includeprice discounts and allowances, co-operative advertising funds,and point –of –purchase display materials. Sales Promotion in Nestle Bangladesh Ltd. Nestle Bangladesh Ltd is one of the leading food and beveragemanufacturer in Bangladesh. They consider ‘Quality’ as their mostvaluable product. Still they have to face tremendous competitionfrom their local and global competitors. As a part of theirmarketing strategy Nestle also use sales promotion toaccomplish their objectives. Basically they prefer tradepromotions than consumer promotions, but they use both of themwhen it is necessary.
Major Sales Promotion Tools Used By NestleBangladesh Ltd. Nestle Bangladesh Ltd use two types of sales promotion: 1. Trade promotion 2. Consumer promotion Trade Promotion Tools Nestle Bangladesh Ltd. uses trade promotion to persuade itsretailers to carry its brands, give it shelf space, promote it inadvertising and push it to consumers. Figure: Trade promotion in Nestle Bangladesh Ltd In Nestle Bangladesh Ltd. Product supply chain consists of Nestleitself, distributors, retain outlets or traders, and shoppers andconsumers.
Distributors collect the product from the Nestlefactory at net product price. Nestle has 78 distributors around the country. Then they sell it to the retail outlets at a priceincluding their commission. Then the retail outlets or traders sellthe product at maximum retail price. In Nestle trade promotions are directed towards the retailers. They persuade them to sell more and more and receive specialbenefits. Then retailers encouraged to purchase more and moreproducts and push them to the ultimate shoppers or consumers.
Following techniques they most frequently use as tradepromotion: * Cash discount In this method retailers are encouraged to purchase a largevolume of product at a discounted price. Nestle set theconditions to get the discount. When a retailer purchase a fixedamount of product then he becomes eligible for the discount. Forexample, Normal price of per case MAGGI noodles is TK. 600. They may ask retailers to buy 5 cases at a time at TK. 550 percase. * Free products By following this technique Nestle offers retailers free product ona fixed amount purchase.
Retailers are asked to purchase a fixedamount of product to get the free product. For instance, they mayasked to the retailers to purchase five cases of MAGGI noodles toget two packets extra with each case. * Special Drive In this technique Nestle encourage the retailers to sell more andmore product throughout the season. In return they attractivebenefits to them. Sometimes they offer special trip, and otherattractive prizes. Consumer Promotion Nestle Bangladesh Ltd. uses consumer promotion urge promptpurchase from the customer and create long term relationshipwith the customers.
