Nestle is a Swiss multinational brand that has a current net worth of around $270 billion. Its
successful pricing strategy has helped the brand reach this state. Their revenue is constantly
growing which shows that the company knows how to place its products in the market. In
general, Nestle’s products are more on the pricier side compared to the products of the retailing
brand.
Nestle has around 2000 brands under it which consist of a variety of product range. Among them,
some of them are the star of the market. Some of the products are globally famous, some, on
the other hand, are more familiar in the local market. Nestle’s powder and liquid products are
the highest selling products. Nestle’s liquid beverages have a sale of over $2.79 billion. Their
liquid items such as Nescafé Original Decaff, Nescafé Gold Decaff, Nescafé Dolce Gusto, etc. are
globally famous. Nestle’s powder milk is also renowned and globally sold. Nestle has mostly
products for every consumer.
Nestle’s pricing strategy is quite unique than the other brands. It solely depends on recognition
which is commonly known as the product’s perceived quality. Perceived quality means that
consumers get to touch and feel the quality of the products. Depending on the quality and
consumer’s approach towards it, Nestle decides which pricing strategy they want to take.
Among the 2000 brands, for some Nestle chooses to offer a more affordable price. It entirely
depends on their market segment. Now market segment usually consists of the target audience.
For example, if Nestle’s target consumers are the mass audience, then they must go for an 
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affordable pricing strategy rather than an expensive one. Which happened in the case of Maggi.
It is more on the affordable side, compared to Nestle’s other products. But then again, if you
globally compare Maggi’s pricing with other noodles brands, then it is a little expensive. For
different regions, Nestle chooses different prices.
Over time Nestle has realized that people don’t do groceries every single day. They prefer buying
in bundles. Hence, Nestle has come up with bundle packs. This includes a Maggi pack of 16. At
first, Maggi used to come in one single pack. After Nestle has introduced its 16 pack offer, the
sales have automatically increased.
Nestle does not want to let go of any consumers. Hence, Nestle has different prices for each
stock-keeping unit. This allows the brand to reach a larger consumer base. For example, starting
from Maggi to Cereal, Nestle has it all. It also provides different pack sizes. For instance, Nestle’s
cereal is a little expensive than the other brands. Therefore, the brand has come up with mini
pouches for day-to-day intakes. These pouches are way cheaper than the bigger pack which
allows the consumers to purchase Nestle’s products.
Nestle provides a lot of discounts in retail stores such as Walmart, Costco, Target, etc. You’ll often
find 5% off, 10% off in their products. Some of the products come in bundles. For example, you
will often see a coffee coming with a creamer. In most cases, they give a few dollars off in these
bundles.
Another common approach that Nestle takes is analyzing competitors’ pricing strategies. Nestle
has a lot of brands. For each brand, they have designated departments that analyze all the
competitor’s pricing strategies. Along with that it also observes competitors’ marketing style,
product innovation, sales records, etc. Competitive pricing strategy helps them achieve the
desired place as they already get the idea of what the consumers prefer.
Demand is another important factor when it comes to choosing the pricing strategy of any
product. Just like all the other brands, Nestle also looks out for demand at the very beginning.
Before even the production of any new good. As it is established that demand and price have an
inverse relationship as per the theories of economics. This usually goes in a cycle. So, if a demand 
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for a certain product is higher, then its price will also increase. For instance, Nestle’s Cerelac is
quite a in demand globally. As a result, the price of their Cerelac is higher than the other products.
On the other hand, when price increases beyond the limit of people’s affordability, the demand
automatically decreases. When this happens, Nestle tries to provide discounts and give more
lucrative offers to the consumers to keep them captivated.
Nestle often has multiple options in one product line. This is called line pricing. For instance,
Nestle has two ranges of coffee. A jar of Nestle’s 7 oz instant coffee is around $7.78. This is on
the more affordable side. On the other hand, it also has a premium side called the “Nescafe Gold”
which costs around $15.80 for a jar of 7 oz.
Globally Nestle tries to follow a pricing strategy that will help them achieve their financial goals.
These strategies usually include the penetration strategy and the skimming strategy. When
Nestle’s products are exported from one region to another, it’s pricing automatically increases.
On the other hand, the company also does price skimming, which means that at the beginning it
sets a higher price and eventually it decreases the price depending on the demand of the
consumers.
Some of Nestle’s biggest competitors currently in the market are Danone, PepsiCo, Unilever, etc.
all of the brands have their own unique strategies. Most of these brands follow the competitive
pricing strategy, penetration pricing strategy and skimming pricing strategy. All of these
strategies are also preferred by Nestle.
Discuss the available pricing strategies of Nestle and give your recommendations