Presented to the Marketing and Law

Department of
Ateneo de Manila University
A.Y. 2022-2023

In partial fulfillment
of the course
MKTG 118: BRAND MANAGEMENT
PASS 1

Submitted by:
Chua, Joseph Stephen
De Asis, Jose Manuel
De Vera, Alvin Kyle John
Pile, Martin Gerard

Submitted to:
Carlo Luis V. Hemedes

October 14, 2022

Company Background

Nestlé was founded in 1866 by two distinct Swiss businesses that would later
form the core of the company. The brothers from the United States Charles A. Page
and George Page established the Anglo-Swiss Condensed Milk Company in Cham,
Switzerland, in August of that year. Henri Nestlé launched a milk-based baby food in
nearby Vevey in September and quickly began marketing it. Both businesses
aggressively expanded their operations throughout Europe and the United States over
the following decades.

According to Nestle Philippines Inc. (2022) “Nestlé Philippines, Inc. (NPI) is a

robust and stable organization that is proud of its role in providing Filipino consumers
with the best food and beverages at all stages of their lives, more than a century after it
first began operations there. The company is one of the biggest in the Philippines with
3,700 workers spread across the country.Its products are No. 1 or strong No. 2 brands
in their respective categories. Nestlé today produces and markets products under a
number of the country's well-known brands, including Nescafe, Nido, Milo, Nestea,
Maggi, Bear Brand, Nestle, and Purina, among others, driven by its mission to nurture
generations of Filipino families. Coffee, milk, beverages, non-dairy creamer, food,
infant nutrition, ice cream and chilled dairy, breakfast cereals, confectionery, and pet
care are now included in its product line.”

Industry Growth

Nestle concentrated its efforts and resources in areas where harnessing the
power of food can have the greatest positive effects on people and animals' lives, the
natural world, our shareholders, and other stakeholders. To them, business is better
when products are good for consumers and the environment. Nestle's success is built
on maintaining a diversified portfolio, both in the aspects of geography and category.
Their adaptability in changing environments and cultivation of their high quality global,
regional and local brands continues to provide long term financial performance.
Nestle's objective is to sustain a mid single digit organic growth rate through quick
innovation, market share proceeds and portfolio management.

According to Nestle Philippines (2022) they consider the following factors:

“Utilizing Nestle's knowledge of nutrition, health, and wellbeing that has been
accumulated over more than 150 years to assist individuals, families, and animals in
leading happier, healthier lives. pioneering nutrition science and culinary abilities,
bringing original, premium ideas to market that are driven by creative discovery and
customer insights. providing items that are wholesome, tasty, and practical for
time-constrained consumers. As people vary their diets, more plant-based food and
beverage options should be made available. Providing an established global footprint
to produce nutritious food that is accessible, secure, and of excellent quality for all
people, regardless of their financial level. Nestle delivers their products in safe,
environmentally friendly, and packaging. committing to challenging sustainability
objectives to improve overall health worldwide, driving the society in progress and aid
sustainable, healthy food programs.”

In order to contribute to the restoration of the environment, enhance the

livelihoods of farmers, and improve the resilience and well-being of communities and
their customers, Nestlé is embarking on a journey toward regeneration. This promise
builds on the company's commitment to reduce greenhouse gas emissions by half by
2030 and completely eliminate them by 2050.

Volume and Value:

According to Nestle in Society (2016) “By enhancing consumers' understanding

of nutrition, facilitating access to nutritious food, encouraging healthy behaviors, and
promoting an active lifestyle, Nestlé creates shared value. Additionally, the company
supports farmers in rural areas in the production of raw materials, promotes
sustainable livelihoods nationwide, and promotes sustainable water consumption.”

High-growth areas totaling 63% of sales, including coffee, pet care, nutrition,
water, and nutritional health science, increased by 8.2%. With organic growth of
16.8%, plant-based food items generated sales of over CHF 800 million. At the retail
level, 31 of the company’s dependable brands, including Maggi, Milo, and Nido,
produced yearly sales of over CHF 1 billion each. Nestle’s digital spending rose to 51%,
while e-commerce sales, which made up 14.3% of total sales, surged by 15.1%. Direct
to consumer companies accounted for 8.7% of revenues and experienced 8.7% growth.
Nestle’s premium offerings accounted for 35% of revenues and experienced 12%
growth. Emerging markets accounted for 41% of sales and experienced 7.8% growth.
Sales of accessible, inexpensive goods, many of which are fortified with nutrients, grew
by 7.1% and represented 18.9% of sales in emerging markets.

Key Success Factors and Market Growth Trends:

Food and beverages are still at the heart of Nestle's strategy today. The
company's goal is to offer the healthiest and tastiest options at all times and in every
stage of life, delivered in a way that saves time and is convenient. To assist individuals
in achieving their health and wellness objectives, they also provide consumer
healthcare products. Understanding and serving our customers will continue to be the
key to our long-term success. Nestle remains at the forefront of the fast moving
consumer goods industry by quickly recognizing consumer trends and acting to
capitalize on them.

According to Nestle (2022), Localization amidst Globalization:

Successfully achieving localization in the increasingly globalized food industry

Product planning, production, marketing and services form a strategy of successful
localization of a global company. Nestle has 2 organizations that focus on leveraging its
global reach to achieve operational efficiencies: GLOBE and GNBS provide the process,
organization and technology infrastructure to allow Nestlé to leverage its global size.
GNBS will enable Nestlé to leverage its scale to increase the efficiency and
effectiveness of its "back office" whilst enabling the markets and businesses to focus
on demand generation and profitable growth.

Global Brand Strategy: Nestle has products that resonate all over the world
under a unified brand. These brands are unified under the Nestle banner, which
delivered a value and reputation of a “global food company” while the products
delivered its own specific attributes.The global corporate brand was the brand
platform for delivering localized products and brands. Nestle has built global brands
such as Nescafe, Nesquik, Nestea, Taster’s Choice.

Successful M&A: Nestle has grown thru organic growth but really thru
successful M&A. Nestle has acquired to enter both emerging and developed markets,
and new product categories. Clear strategic focus: Food & Beverages, Nutrition, Health
& Wellness, adjacencies to existing core businesses o Within these strategic focuses,
12 of their brands represent 70% of sales, most are #1 or #2 in Market Share. Clear
criteria for transactions: Enhancing key metrics, strong market positions, brands,
capabilities, ease of integration (culture). Global scope but focus on bolt-ons: both
emerging and developed markets. M&A drives profitable growth through competitive
advantages, growth drivers, and operational pillars.

2. Analysis of the top competitors using the 5 bases of brand equity

Given that Nestle is one of the largest food and beverage processing companies
in the world, it competes with other highly established multinational corporations,
particularly those that also possess a diverse portfolio of products (Nestle, n.d.). In the
Philippines, the group identified Nestle’s most significant competitors (in terms of
relative scale and product offerings) as the following:
Mondelez International
Having established operations in the country all the way back in 1963,
Mondelez International has brought us iconic products like Oreo, Cheez Whiz,
Toblerone, and Tang (Mondelez, n.d.). Mondelez International has a wide range of
products that cater to many different customer segments, focusing particularly on
snack offerings.
 1. Brand Awareness

Mondelez utilizes a House of Brands approach—each of their brands possesses

its own unique identity, with the parent company taking second priority. That said, the
presence of the white and purple Mondelez logo on packaging and advertising
materials is enough to form associations with the brand and its many product offerings.
Their page currently has 266,000 likes on Facebook, and 52,000 followers on
Instagram. Mondelez has over 80,000 employees deployed across 80 countries.

2. Brand Loyalty

As Mondelez’s brands possess their own unique identity, it’s difficult to

accurately quantify customer loyalty towards Mondelez as a whole versus each
individual brand. As such, it makes more sense to look at brand loyalty from the
perspective of each of the company’s respective brand offerings.

Oreo is one of Mondelez’ most successful products, being sold in large

quantities in over 100 countries across the globe (Kasi, 2019). Its prevalence and
ubiquity is hard to match—it can be found in all sorts of related products like
McDonald’s Oreo McFlurry and Dairy Queen’s Oreo Blizzard, just to name a few
(Campana, 2021). Oreo ranks among the top of the world’s favorite brands in various
categories (RankingTheBrands, n.d.). Globally, the snack company holds 1st position in
biscuits (cookies & crackers) and 2nd place in chocolates (Mondelez, n.d.).

In order to capitalize on this, Mondelez has launched multiple collaborations

between Oreo and their other offerings. Some of these include Oreo x RITZ and Oreo x
Cadbury, both of which aim to bridge the customer loyalty of one brand to the other
(Rakshit, 2019).

3. Perceived Quality

Mondelez’ brand image is one of a high-quality global snack provider with

offerings from all categories. Their main offerings (Oreo, Chips Ahoy, Ritz, Cadbury)
are highly established and iconic brands that are sold internationally.
 4. Brand Associations

Mondelez is associated with a large variety of consumer snacks. As mentioned

previously, each of their brands possesses a unique identity; they cover different target
segments, though most aim to appeal to the mass market. As mentioned previously,
some of their main brands include: Oreo, Cheez Whiz, Tang, and Toblerone.

5. Other Proprietary Brand Assets – Patents, Trademarks, Channel Relationships,

etc.

Mondelez’ main brand assets are their name and logo. The Mondelez name is a
combination of the Latin words for “world” and delicious” (Stevens, 2012). According
to the company’s brand book, their logo consists of a logotype (Mondelez name) and
“flavor burst”—the little water droplet shapes at each end of the logo (Mondelez,
2012).

Also in the brand book, the company has several icons designated for each of
their product categories.

6. Brand Equity Framework

PepsiCo

1. Brand Awareness

PepsiCo is one of the largest food, snack and beverage corporations in the
world. With over 500 brands and $79 billion in net revenue last 2021, the company is
best known for its convenient drinks and food products (PepsiCo, n.d.). Some of their
most prominent brands include Pepsi, Gatorade, Mountain Dew, Doritos, Lays, and
Quaker. They follow a similar House of Brands approach to Mondelez. Their page
currently has 382,000 likes on Facebook, and 113,000 followers on Instagram.

2. Brand Loyalty

Same with Mondelez, quantifying loyalty towards PepsiCo as a whole is difficult.

That said, the company’s individual products do give some insight into the brand—in
terms of carbonated drinks, Pepsi is only second to Coca-Cola in terms of brand
loyalty; 94.4% for Coke, and 89% for Pepsi for the respective brand umbrellas
(Palmquist, 2016). Similarly, Frito-Lay (under PepsiCo) accounts for a whopping 40% of
all savory snack sales in the US, and 30% globally (Lucas, n.d.).

3. Perceived Quality

PepsiCo offers a wide variety of consumer goods that, as the company says, aim
to “create more smiles with every sip and every bite”. The company offers an
exceptional range of choices to suit every need. Compared to its competitors, PepsiCo
ranks fairly high amongst brands preferred by millennials (Comparably, n.d.).

4. Brand Associations

PepsiCo’s main products are drinks (carbonated and non carbonated) and
snacks. Unsurprisingly, the company is most known for creating Pepsi (hence the
name), though Frito-Lay comes in at a close second thanks to its prevalence in the
snack industry. PepsiCo is associated with general consumer foods, with their products
commonly found in supermarkets and convenience stores worldwide.
 5. Other Proprietary Brand Assets – Patents, Trademarks, Channel Relationships,
etc.

Due to the large diversity of the company’s product lineup, PepsiCo’s branding
mostly revolves around their name and logo. PepsiCo had a total of 6086 active
patents as of 2022, most of which were filed in the USA. Some companies (including
Nestle) even cite these patents for their own research and development (GREYB,
2022).

6. Brand Equity Framework

Nutri Asia

1. Brand Awareness

With a wide range of seasoning and condiment products, NutriAsia established

itself to the public as a well known company that served the public brands such as Datu
Puti, Silver Swan and Mang Tomas . They’re known brands such as Datu Puti and Silver
Swan rank amongst the top two of most chosen food brands among Filipino consumers.
(NutriAsia, n.d.)
 2. Brand Loyalty

Since the company highly utilizes on seasoning and condiments, the use of these
items would be present in everyday foods. These would encourage customers to stick
with the brands such as DatuPuti and SilverSwan in their preferred use of said
condiments as these items are established in their recipes.
3. Perceived Quality

NutriAsia boasts itself as being one of the top chosen food brands among
Filipino consumers. Its product quality deems to be at par with the needs and wants of
Filipino consumers winning several awards over the years. (Metropoler, 2021)
(Person,2021)

4. Brand Associations

The company is known for food products and condiments. Its known to have
brands that are in the industry for quite some time. These brands are Datu Puti,
SilverSwan, MangTomas, UFC, PAPA, Golden Fiesta, Locally, AlcoPro, Jufran, Mafran.

5. Other Proprietary Brand Assets – Patents, Trademarks, Channel Relationships,

etc.

The company currently has 33 trademarks with the Datu Puti and SilverSwan
logos being the most popular.(CrunchBase,n.d.)

6. Brand Equity Framework

Brief description of the company, the chosen brand, and its product lines

Nestle is a brand that uses food to enhance the quality of life of whoever
indulges in their products. They believe that good food has its own set of benefits, from
nourishment to delightment of senses. Creating good food is their main focus and
Nestle says that this is what brings families together. They also mention that they
respect the planet and protect resources for the future of our generation. Nestle also
regularly hosts events for families to come together; one of the most prominent and
longest-running examples is Milo Best. Here, they have kids and teenagers play
different sports like volleyball and basketball, with the parents being able watch their
kids play against the other participants. Milo also has sports clinics where they coach
kids on how to play certain sports.

Nestle offers a wide variety of products ranging from milk, cereal, iced tea,
protein bars and many more. They have products for families—everyone from kids,
adults and even elders are covered. Nido and Chuckie cater to the kids, while Nescafe
targets Filipinos who wake up early in order to work and provide for their families, that
is why Nescafe’s tagline is “It all starts with a Nescafe.”. They even have energy bars
called FITNESS chocolate bars for people who love to workout. Nestle is a diverse
brand hence why it is so loved by the masses. An excellent example of how the
company’s product lines relate to general Filipino living is Chuckie. Young children will
always look for someone they can count on like a buddy. So, Chuckie made a mascot
with the tagline “My chocolate-y buddy”. For children, this means a lot because they
can always count on Chuckie to make them happy.

Analysis of the brand in terms of the 5 bases of brand equity vis-a-vis its strongest
competitor

In order to better understand consumer perception regarding Nestle as a

whole, the group conducted a short survey. Using the convenience sampling method,
31 responses were recorded from a primarily male demographic (65%) aged between
18-25 years old (90%). Participants were mostly students residing in the Metro Manila
area (84%), with a majority having a monthly family income of over P100,000 (77%).
The main highlights from the survey are as follows:

1. Amongst mentioned competitors (NutriAsia, Mondelez, Kellogg’s), Nestle

comes top of mind for 80% of respondents in consumer food products (Milk,
Coffee, Cereals, Cookies)
2. Over 90% of respondents mentioned that they grew up consuming products
from Nestle
3. Milo is by far the most recently purchased Nestle product among respondents.
Milk and Nescafe are at a close second.
4. Nestle is most strongly associated with Family-Orientedness and Joy &
Happiness.
5. Nestle is somewhat correlated with Health & Wellness, with a mode rating of 3
out of 5 in terms of association strength.
6. 90% of respondents view Nestle as a reputable brand. They mention that it’s
tried and tested, has been established for a long time, and was/is used by friends
and relatives.
7. Respondents prefer Nestle over other brands due to familiarity, household
preference, and regular exposure. Quality is also seen as good.
 Given the above results, Nestle is seen in a generally positive light within the
local context. It’s very strong relative to its closest local competitors, and holds
significant mindshare in the general consumer food product space. Two things worth
highlighting are how: 1) a vast majority of respondents grew up consuming Nestle
products, and 2) Nestle has some associations with Family-Orientedness and Joy &
Happiness. These help support the idea that Nestle is an established household brand,
one that is trustworthy and present in the lives of many as they grow older.

When it comes to competition, in terms of food offerings, the most comparable

amongst the three mentioned in the previous section is Mondelez. Though PepsiCo is
more similar in terms of size, its focus on ready-to-drink beverages and snacks puts it in
a position where it doesn’t really compete in the same consumer segments. Mondelez,
on the other hand, not only has a more relevant set of product offerings, but also
maintains a strong presence in the Philippine market, having begun operations here in
1963. The 5 bases of brand equity of the two companies are given below.

Nestle Mondelez

Brand ● Hosts events such as ● House of Brands approach

Awareness Milo’s best and Milo Fun ● Logos on packaging and
Run (occasionally) advertising
● Nestle is a top-of-mind materials
brand when it comes to ● 266,000 likes on Facebook
consumer food products ● 52,000 followers on
● 11,000,000 likes on Instagram
Facebook
● 380,000 followers on
Instagram

Brand Loyalty ● Respondents believe ● Very high loyalty to certain

Nestle to be a products like Oreo
well-established and ● Collaborations between
trustworthy brand owned brands
● Existing users are loyal ● #1 competitor in biscuits
to the company due to
familiarity

Perceived ● Comply with internal ● High quality global snack

Quality and external food safety provider
● Tried and tested among ● Most popular offerings are
Filipinos; ubiquitous biscuits and chocolates
 Brand ● Associated with a wide ● Associated with consumer
Associations range of food and drinks snacks such as:
including: ○ Oreo
○ Nescafe ○ Chips Ahoy
○ Milo (drinks and ○ Ritz
cereals) ○ Cadbury
○ Nido ○ Tang
○ Bear Brand ○ Cheez Whiz
○ Kit Kat ○ Eden Cheese
○ Nestea

Other ● Nestle’s logo is known ● Proprietary name and logo

Proprietary for having the three design elements (“flavor
Brand Assets birds as their logo burst”)
● They are also known for ● Designated icons for
using a blue background product categories

Nestle is a big name here in the Philippines, boasting many different in-house
brands such as those mentioned above. One way that the company establishes brand
awareness is through the events that it holds every year. Nestle hosts events such as
Milo Liga wherein kids get to play the sports they love with other kids that share the
same passion. Nestle also has a fun run called “National Milo Fun Run” wherein people
from across the country get together to run alongside their family. The company also
has billboards scattered all around the Philippines and regularly airs video
advertisements (TV and digital) which showcase its different brands. These
advertisements exhibit the nutrition behind the products of Nestle such as Nestea,
Milo, and Nescafe. As for Brand Loyalty, survey data showed that many people choose
Nestle in the Philippines as it is well-known, highly established, and competitive in
terms of value. Nescafe, for example, is highly popular amongst the masses due to its
relatively low price. On the other hand, students remain very loyal to Milo, as seen by
how it won the award of “Student beverage brand of the year (Nestle, 2018)”.

On the company’s website, Nestle boasts about its internal food safety as well
as no waste attitude (Nestle Quality and Safety, nd.) The company states that by
guaranteeing food safety and compliance with quality standards, they are able to
create added value for consumers.

In the Philippines, Nestle is associated with many brand names, such as Nescafe,
Milo, Nido, Bear Brand, Kit Kat, Nestea, Chuckie, and many more. Chuckie is highly
popular amongst children, and is an established brand that many parents can trust. On
the other hand, Nescafe offers a decent at-home instant coffee experience. Since the
sachets are so cheap and accessible, people can buy Nescafe at nearby sari sari stores
for personal consumption anytime, anywhere. To cater to other segments, they also
offer varieties such as capsules, beans, sachets and many more.

Amongst the most prominent of Nestle’s proprietary brand assets is their logo.
It is composed of three birds in a nest, implying some sense of family and household
care. Visually, the company is also known for regularly using a blue background for its
logo presentation.

As listed in Nestle’s website, the company’s motto is “Good food, Good life.” The
primary focus of Nestle is to unlock the power of food and enhance quality of life for
everyone. In other words, the goal of their brand is to promote good and healthy food
for the whole family. They make their products healthier by adding ingredients such as
vegetables, fruits, nuts, and many more. Nestle products also have nutrient-dense
products through increasing positive nutrients and ingredients.

Given all these, Nestle as a whole plays a huge role in the lives of Filipino
families nationwide. A total of 25 out of 31 respondents answered Nestle when asking
when shopping for goods, what brand comes to their mind. This alone goes to show
that Filipinos love Nestle. A lot of the answers in the survey also talked about how
Nestle is a big brand as well as something they grew up with or is the most trusted.

Closing Rationale

As a whole, Filipino consumers view Nestle in a positive light, associating it with

quality, reliability, and to a certain extent, family. Having maintained a presence in the
country for many decades at this point, the brand has touched the lives of Filipinos on a
scale that few others have been able to achieve. The company’s diverse lineup of
consumer food products and reasonable pricing have allowed it to gain mass-appeal,
catering to people of various ages and demographics. As such, it’s not surprising that
the vast majority of survey respondents grew up with Nestle products on their dining
tables and cupboards, remaining loyal to the brand until this day.
 Nestle’s tagline of “Good food, Good life” helps to align the brand with the
concepts of health and wellness. Survey respondents concur with this, proving that the
brand has some equity in this regard, rating the brand at a mean average of 3 [out of 5]
points here in terms of association strength. Nestle’s other efforts, including the Nestle
Health Science initiative prove that the company is serious about its pursuit towards
creating better food products.

All these come together in rationalizing how Nestle can establish itself as a
brand that makes health more equitable for the general public. The brand would pair
well with an organization like the Family Planning Organization of the Philippines (FPOP),
which aims to promote better reproductive planning in the realm of health and family
wellbeing. Nestle’s associations with family would also prove beneficial in this regard.

Overall, given its brand equity, core values, and relative capacity, Nestle is in an
excellent position to promote equitable health for Filipinos.
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APPENDIX

Figure 1a. Top-of-mind awareness

Figure 1b. Prevalence of Nestle products in the lives of consumers

Figure 1c. Ranking of brand associations with Nestle

 Figure 1d. Reputability of Nestle

Figure 1e. Strength of Health & Wellness association with Nestle