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Description Of Nestlé (Thai) School Channel In Ice Cream Business Unit And Current Crm Complication

1680 words - 7 pages

2. Issue research & analysis

2a. Objectives

To find a strategic technique to win over prospective customers and retain current customers through school’s decision making units in order to increase overall sales revenues.

2b. Literature Research

Most of the data needed for research objectives are about Nestlé (Thai) ice-cream business unit, which are neither available in textbooks nor websites. Therefore, the data for primary research of this report will derive from an in-depth and recorded interview with Ms Thitikarn Suwansukhum, a trade marketing promotion executive of school channel in Nestlé (Thailand) company, ice-cream business unit. I will combine the interview with an analysis based on a theoretical method from CRM textbooks, as well as many academic journal articles related to Business-to-Business CRM and online website articles.

2c. Literature Review

i. The total revenue of Nestlé (Thai) ice-cream business unit in 2009 was 1,890 million baht. There are four sale channels of the ice-cream products. Sales volume in the school channel represented 480 million baht (49.68 Thai baht equal £1 Great Britain pound sterling as of 7 April 2010 quoted by Bank of Thailand), representing one fourth of the company’s total sales revenue in 2009. In the last five years, Nestlé school channel has expanded to around 5,000-7,000 schools. School channel penetration was hardest and toughest compared to other distribution methods. However, once the decision maker of a school trusts the brand, the loyalty is strong and sustained.
In Thailand, the entire ice-cream market is estimated to be worth a total of 5,400 million baht. The market share of Nestlé ice-cream is 36 percent, trailing behind Wall’s ice-cream which is distributed by Unilever company and has a 43 percent market share (AP Food, 2004). Nestlé needs to initiate relationships, acquire new customers and retain current customers in order to be number one in the market.

In the initial step, Nestlé need to evaluate and identify prospects for relationship development to retain customers in schools. Nestle can identify prospects as the first step because Nestle has some of the competitor’s information and somewhat able to project prospects from that information. For the second step, Nestlé should simplify their product offers by offering to pay the electricity and maintenance bills for ice-cream freezers in schools. The third step is to guarantee the core benefit by offering a minimum fixed profit for the first six months when they sign a 1-year contract with Nestlé. If the sales volume of ice-cream in school is less than the minimum amount, Nestlé will pay for the difference so that the school does not feel the pinch. The fourth step is to encourage a trial period by offering a one-month trial period to sell Nestlé ice-cream. If the school has been selling the competitor’s ice-cream, Nestlé will pave the way for the competitor’s leftover ice-cream to be transferred to a Nestlé...

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