Service Marketing and Management (Research Paper Sample)

Service Marketing and Management
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ABSTRACT/SUMMARY
This paper is a service marketing and management essay which analyzes in detail the food and beverage industry. The company in the food and beverage industry used as a case study is the Swiss multinational food and beverage company, Nestlé. After a brief introduction of the food and beverage industry in which Nestlé operates, this offers a thorough business analysis of the industry. The most salient issues assessed in the business analysis section include the services and basics offered by Nestlé, the service delivery process, a service flow chart and the different customer encounter points at Nestlé. The next section of the paper is devoted to carrying out a problem analysis of Nestlé. Important issues analyzed in this section include the identified problems, research on how to solve the problems, actual solutions to the problem, analysis and justification of the problems and the assessment of a potential situation in which the solutions become abortive. This paper also offers recommendations on how o enhance business at Nestlé. At the end of this paper is a conclusive summary of the entire discussion followed by an alphabetical list of the references cited herein.
Table of Contents TOC \o "1-3" \h \z \u INTRODUCTION OF THE INDUSTRY PAGEREF _Toc392763996 \h 3BUSINESS ANALYSIS OF THE INDUSTRY PAGEREF _Toc392763997 \h 5Services and basics by Nestlé PAGEREF _Toc392763998 \h 5Service delivery process PAGEREF _Toc392763999 \h 7Service flow chart PAGEREF _Toc392764000 \h 8Customer encounter points PAGEREF _Toc392764001 \h 8PROBLEM ANALYSIS PAGEREF _Toc392764002 \h 9Identified Problems PAGEREF _Toc392764003 \h 9Research & Solutions to the problem PAGEREF _Toc392764004 \h 11Solution analysis and justification PAGEREF _Toc392764005 \h 11If the solution does not work PAGEREF _Toc392764006 \h 11RECOMMENDATION(S) PAGEREF _Toc392764007 \h 12CONCLUSION PAGEREF _Toc392764008 \h 12REFERENCES PAGEREF _Toc392764009 \h 13
INTRODUCTION OF THE INDUSTRY
The food and beverage industry in which Nestlé operates is one of the largest industries globally. Nestlé is a Swiss global food and beverage firm which was founded in the year 1866 by Henri Nestlé, George Page and Charles Page (Hitt, Ireland & Hoskisson, 2008, p. 261). Nestlé has headquarters at Vevey, Canton of Vaud and its current chief executive officer is Paul Bulcke. Nestlé is the largest food and beverage company in the world and therefore the market leader in the food and beverage global industry. Currently, Nestlé has more than 29 different brands (for instance Vittel, Nesquik, Nepresso, Nescafe, Maggi and Kit Kat) which autonomously make revenues of approximately a billion Swiss Francs annually. Nestlé products include ice cream, baby food, coffee and tea, bottled water, dairy products, pet food, snacks, breakfast cereals, confectionary and frozen foods (The Telegraph, 2012).
With over 447 factories globally and business operations in an estimated 194 countries, Nestlé has more than 333,000 workers (Hitt, Ireland & Hoskisson, 2008). The main competitors for Nestlé are Kraft Foods, PepsiCo, Mars Incorporated and Unilever (The Telegraph, 2012). Nestlé operates in the food and beverage industry and is thus involved in the production of finished food products from raw agricultural ingredients as well as increasing the shelf life of products in adherence to the rules of hygiene and health set by relevant regulatory agencies (Bauer, 2014). Business firms operating in the food and beverage industry are also commonly engaged in the packaging of food and processing of meat. The processed and packaged food products may then be purchased by wholesalers and retailers for distributions to end consumers. It is noteworthy that the food and beverage industry is characterized by high degrees of competition by rival firms.
The commercial firms operating in the food and beverage industry must come up with strategies to allow them sustainable competitive advantage over their rivals. Nestlé, for example is able to report a consistently good performance through placing an emphasis on efficiency of processing and distribution business activities. Additionally, companies operating in the food and beverage industry, for instance Nestlé, Mars and Kraft, formulate and execute diversification strategies as a form of competitive advantage. The diversification strategy may be characterized by addition of related products to the current portfolio or spreading out to unrelated businesses (Bauer, 2014).
In similar manner to other industries of the world, the food and beverage industry in which Nestlé operates has been impacted by the economic downturn that has occurred globally since the Global Financial Crisis of the year 2008. Despite this, however, the impacts of the global financial meltdown have not been as impactful in the food and beverage industry as in other business sectors (The Telegraph, 2012). The main reason for this state of affairs is the fact that the twenty first century is characterized by an increased demand for ready to serve and convenient food products. Amongst the major challenges in the food and beverage industry in which Nestlé operates is increased prices of raw materials such as corn and diary products that are required for the production of different types of food products and beverages (DuBois, 2011). The greatest opportunity that currently exists for the food and beverage industry is the increased demand by consumers for health products and organic foods and beverages.
BUSINESS ANALYSIS OF THE INDUSTRY
Services and basics by Nestlé
As the world’s largest company in the food and beverage industry, it is not surprising that Nestlé presents its customers with a variety of goods and services (The Telegraph, 2012). As customers engage in the purchase of the different Nestlé goods and services, they have needs, wishes and aspirations that they expect Nestlé to meet.
* Services
Webb (2010) asserts that the global food and beverage industry has grown considerably over the years and is currently "serving more than 100 million meals per day" (p. 2). The services by the food and beverage industry in which Nestlé is a market leader have spread to different areas of life, for instance, hotels, airways, industrial canteens, food trucks, restaurants and hospital canteens. As a service provider, Nestlé is tasked with the responsibility of ensuring that it serves customers with food and beverages that are effective in successfully satisfying the different types of needs that customers wish to fulfill.
As indicated by Webb (2010), the services offered by Nestlé are aimed at fulfilling five types of customer needs. These are: Physiological, economic, social, psychological and convenience needs. While physiological needs describe the customer’s desire for particular food and beverage items, economic needs refer to the desire by customers to get value for their money which they use to make purchases (DuBois, 2011). Social needs describe the need by customers to be served in an atmosphere characterized by frankness and friendliness. Psychological and convenience needs, refer to the aspiration by customers to have their self esteem enhanced, and someone to do their work for them, respectively (Webb, 2010).
* Basics/Goods
The goods provided by Nestlé in the industry are categorized into seven main product categories. These are: Beverages, pharmaceutical and healthcare products, confectionary, water, pet care, dairy products and cooked foods and cooking aids (DuBois, 2011). Figure one below depicts the highest sources of revenue for Nestlé based on the product categorizations.
Figure 1
The largest sources of revenue for Nestlé are obviously the beverage and dairy product segments which accounts for 26% each, of the total sales by Nestlé. The beverage product segment in Nestlé is comprised of both powdered and liquid beverages. The most popular beverages offered by Nestlé include Milo, Nesquik, Nescafe, Nestea and Perrier. The diary product category at Nestlé is comprised of ice cream and milk products such as Carnation, Nido, Coffee-mate and laLaitiere. There are different types of ice creams offered by Nestlé (The Telegraph, 2012). The most popular include Dreyers, Extreme, Hoogen-Dars, Movenpick and Ice Cream Nestle (DuBois, 2011). After beverages and dairy products, the product category that brings in the most sales for Nestlé is the cooked food and cooking aids product category which brings in an estimated 18% of Nestlé’s total sales. Foodstuff in this group of Nestlé products includes Chef-Mate, Santa Rica, Minor’s, Davigel, Chef Michaels, Maggi and lean cuisine (DuBois, 2011). Refrigerated products include Katie’s Pizza, Buitoni, Nestlé and Toll House.
The pet care and confectionary product categories in Nestlé each make up 16% of Nestlé total sales. The pet care products at Nestlé, which mostly target dogs and cats, include Alpo, Chef Michaels, Beneful, Bakers, Cat Chow, dog, Chow and Fancy Feast (The Telegraph, 2012). Chocolate, confectionary and baked goods group is comprised of products such as 100 Grand Bar, Abuelita, Aero, Baby Ruth and Butter Finger. Nestlé also offers health and pharmaceutical products such as Boost, Optifast Nutren, Resource and Peptamen (DuBois, 2011).
Service delivery process
It is noteworthy that the different needs that customers have play a very significant role in determining the different service methods that will be us...