Customer Satisfaction And Cost Of Nestle Dairy Milk Essay

And the customer are sensitive to the price since those products are using only few times and need to be change all the time.

Pricing can play an important role in the success or disaster of any product. Too high a price and the product will fail; too low a price and not enough profits will be made to sustain business operations (Hisrich, Peters, & Shepherd, 2014). The key is to make the customer think that they are paying exactly the right price for the product. Anything else though in this regard means the product is not positioned well in the mind of the consumer. First of all, Gril-Kleen will have to decide on what sort of strategy it needs to pursue. This strategy is decided on three factors namely costs, margins and competition.

Thirdly, option is to strategically adjust the prices of their products because consumers are often very price sensitive. By doing so the company can either create more value that defines the quality and quantity of the product.

* Buyers try to switch cost because of the same product available at other retail stores.

Nestle, an international recognized multinational corporation is the world’s leading nutrition, Health and Wellness Company. Nestlé’s mission of “Good Food, Good Life” aims at providing customers with the finest quality of nutritional choices within a wide range of food and beverage classifications (NESTLÉ - Vassos Eliades. (n.d.). Retrieved from http://www.vassoseliades.com/consumer-goods/nestle.html, para. 1). The merger in 1905 between Nestle and the Anglo-Swiss Milk Company created the Nestle we know today. Nestle is one of the world’s largest suppliers of food and nutritional products operating with 461 factories in 83 countries, with 328,000 employees worldwide (Fries, Lorin, Goldberg, Ray, 2012. Nestle: Agricultural Material

Cost-plus pricing lead to a complicated pricing structures, since distributors and customers negotiated separate product prices from manufacturers, introduced incentives, let prices vary from customer to customer, covered some products by contract and some don’t etc.

As the price of the products is comparatively low, that will increase the purchasing power of the customer and they will buy in larger quantity and thus the company gains the profit. (Soni, P. (2016))

The company has a need to make choices sometimes whether to make or buy certain of the products carrying their brand. On other occasions they are also required to make decisions on special prices when a potential retailer makes an offer to buy goods from them at a price lower than their normal price.

Firms use cost-plus pricing in order to cover their operating costs. Cost-plus means they can increase the price to their customers with whom they have contracts when the operating costs rise. Operating costs can rise for many reasons and cost-plus pricing allows firms the flexibility to manage operating costs. This flexibility is often needed when the price of a service or good is not known or hard to predict in advance (Magloff, 2011).

The goal here is to keep the prices down, keep the people buying and keep the materials flowing. A key strategy business use to keep prices down is to externalize costs. That means that the price tags on consumer products don’t capture the true costs of producing and distributing all these stuff.

Since the demand for the brand has traditionally outstripped supply, the company can easily and without loss charge a premium from its customers. As mentioned the company sells its products at a 100% markup and which in turn translate into increased revenues.

Generally a customer wants quality goods at a low cost. They would also want a variety of products to choose from and convenient way to purchase the products.

Once the consumers like the product and realizes it is good quality, then they accept the product and the low pricing help the product create some buzz in the market and have some good techniques.

Descriptive (qualitative) survey design was used because it was suitable as it was to provide more and varied information on the market about their feelings, behavior and other factors that could not be quantified. The findings of the sample population were to be generalized to the whole population (Taylor & DeVault,2015).

Since Henri Nestlé developed the first milk food for infants in 1867, and saved the life of a neighbor’s child, the Nestlé Company has aimed to build a business as the world's leading nutrition, health and wellness company based on sound human values and principles.