I.

Introduction

NESTO is well renowned supermarket in some emirates in the United Arab Emirates. it has been

able to develop its strong customer base over the years. It started its operations in 2004 and

have grown from strength to strength since then. From very humble beginnings it has now a

retail network of more than 79 stores and growing all around the GCC. One of their core values

for development is to ensure that the company is providing on convenience and accessibility

with competitive prices. The company has its headquarters in Sharjah (NESTO, 2020).

The vision of the company is “To provide a Great Shopping experience and integral part of our

loyal customers lives, by offering high quality shopping experience through good product,

quality at even better prices.” (NESTO, 2020)

This project would assess the marketing strategies used for its stores across the United Arab

Emirates and beyond. The focus would only be on the strategies which are being used for

promoting their supermarkets and hypermarkets. The product range would be the FMCG

division. This would include the vegetables, cosmetics, groceries, toiletries etc.

II. The External Marketing Environment

The external marketing environment is an essential aspect for the success of a business. The

external environment can be crucial for the demand development. This can also mean that the

overall performance of the company can depend upon. This section will analyze the external

environment which Nesto is facing.

Social Factors

This social factors refer to the impact of the society and the way the whole society is looking at

the product which the company is offering in the market. The market in the United Arab
Emirates is looking towards better quality products. This would mean that the society is more

into getting better quality products rather than looking only for the prices. This is extremely

important for the business to ensure that they can flourish in the market. There is a strong need

for a company to cater to the attitudes of the society. The food items which are being offered

must have a huge influence of healthy element. This should then be accompanied by the other

services which are on offer. There is another attitude towards the general consumers that the

hypermarkets are offering lower prices when compared to other retail channels. This also gives

them an edge towards the fact that price conscious consumer would also go towards a hyper

market rather than heading to a smaller super market or store.

Demographic Factors

The demographic factors include the age, sex, marital status, incomes of the population. The

UAE population was expected to grow over the years. However, the COVID-19 pandemic had its

own fair share of problems. There is clear expectation that thousand of workers would be

leaving the country. this would mean that the overall population would be reduced. This might

have an impact on the overall impact on the operating of the business as a whole. However,

there must also be a mention that the product which is being focused by Nesto are the goods

which have to be demanded. Thus, despite the fall in population in the United Arab Emirates

there would still be a stable demand pattern.

Economic Factors

The GDP of the United Arab Emirates was expected to grow substantially over the next few

years. However, the pandemic has actually changed all the estimates. There has been a clear

need for the companies and businesses all around the world and see the faltering economies in
many different places. The UAE economy is also expected to suffer due to the pandemic.

However, there are several reasons to consider the fact that there is a silver lining as far as the

UAE is concerned. firstly, the government has announced many different measures which are

being aimed to promote business. Furthermore, the company is targeting the essential goods

which would have to be purchased even if there is lack of income.

Technological Factors

The technology can actually play a dominant role in any business. The infrastructure of the

United Arab Emirates is one of the best in the region. There is a clear way the company is in a

position to ensure that they can grow based on the infrastructure. One of the examples of the

efficient infrastructure is the fact that despite the pandemic and the problems other countries

were facing due to the pandemic and shortage of food. The UAE faced no shortage of food and

was extremely efficient in it too.

Political and Legal Factors

The United Arab Emirates has one of the most stable political environment. This is due to the

fact that there is little chance of political turmoil. The country’s leadership promotes and

encourages business. This also helps to ensure that a business is developing its performances.

Competitive Environment

The competitive environment is one of the key issues which Nesto would be facing when they

are operating in the United Arab Emirates. This is due to the fact that there are other

established rivals like Carrefour, Union Cooperative, Lulu etc which can prove to be extremely

difficult for the business to succeed.

SWOT Analysis

Strengths Opportunities

 Financial resources  Moving into newer markets.

 Experience  Organic Market

 Brand Image
Weaknesses Threats

 Lack of luxurious brand image  Fall in demand

 Lack of high quality product  Competitors

 Online Market

III. Market segmentation, Targeting, and Positioning Strategies

This section will take into account the market segmentation, target market and how Nesto is

positioning itself in the United Arab Emirates market.

Target Market

One of the key aspect of the company’s target strategy has been the fact that it is locating in

cheaper industrial areas. The main focus has been the lower to middle class as far as the

demographics are concerned. this has helped them to survive in the market where the

competition is more focused on the higher end of the market. Thus, quality specifically the

target market for the company is limited to lower and middle income group.

The segmentation strategy has been based on attracting lower income families and the

expatriate workforce. There is a term which is prevailing the United Arab Emirate which says

that the workers who are not staying with their families are considered as bachelor. This is the

clearest of indications that the business is targeting such market with the product range

focusing on the needs of the customers.

There is some strong competition in the market. This is due to the fact that there are smaller

brands who are providing localized offering to the customers. Companies like Madina Super

Market, Souq Al Mubarak are targeting a similar niche market which is making the competition

more difficult in the market (Varadarajan, 2009).

Product Strategy

The product in question includes the FMCG. This would mean that the company is offering fresh

vegetables, toiletries etc. Nesto has not been able to reach towards the augmented product. It

is only basing its products on lower price with reasonable products. This means that they are

not offering delivery or other related after sales service. This is one of the key aspects which
must be taken into account. This offering however, goes with the companies positioning

statement due to the fact that the company is more focused on the sale at lower prices.

This is a perishable consumer product which is a convenience product. The customers would

not be willing to go far for procuring this product they are offering. Thus, for Nesto it is essential

that they are near their target market. (Kotler & Keller, 2016)

The brand name is not as attractive as it should be. There is little brand meaning attached to it.

The brand name does not signify a particular meaning towards it.

The stage of the product lifecycle can be considered maturity as it is a necessity and the

products are already reaching their potential as far as the need and information about it is

concerned.

Pricing Strategy

As mentioned before Nesto is targeting middle and lower end of market. This is also important

to note that the customers are extremely price sensitive. A higher price would lead to the

customers moving away from the market. This would mean that the prices are extremely value

based. The customers would always need lower prices. The company is offering loss leaders

which is being followed by the company to attract the customers too. (Kotler & Keller, 2016)

Promotion Strategy

This section would include the promotional strategy which is being used by Nesto. It would take

into account the advertising, sales promotion, public relation etc.

Advertising: there is limited advertising conducted by the company. They are focusing on the

advertising by printing brochures about the offers and the products they are having and

distributing it in the neighborhood they are operating. For example the brochures are then
given out to people and the shops nearby. They are also distributed to the buildings to ensure

that the customers are aware about the products on offer. This is also the major promotional

strategy which is being used too. The different offers and the lower prices which are on offer

are displayed and given to the customers to ensure that they are ware about the products

which prices have reduced in a significant amount (Torkzadeh et al., 2020).

Distribution Strategy

The product which is in discussion is a convenience product. This approach has been followed

by Nesto to ensure that they are offering their products in nearly all the neighborhoods in their

target market. There is a clear focus on opening as many branches as possible. This would result

in the firm being able to tap into the customers directly. The intensity of the distribution is

extensive as it has wide distribution network (Saldanha et al., 2018).

Social Responsibility

There is very little marketing effort which is being conducted by the company. They are not

active in terms of reaching out to the customers. There is also no mention of the social

responsibility. This is one of the area where there is a need for the company to invest heavily

and differentiate in the market.

Conclusion

The Nesto Group has seen some dramatic rise over the years. The market niche which the

company has targeted can be seen as a strong way to success. They have ensured that they are

able to succeed in the market. However, there are still room for improvement. This can be

made with the expansion of targeting other segments in the market too. this would ensure that
the business can grow and succeed in the long run. The pandemic can have its implications but

it needs to explore other avenues for success in the long run (Osakwe, 2019).

References
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Kotler, P., & Keller, K. L. (2016). Marketing management. Pearson.

Torkzadeh, S., Zolfagharian, M., & Iyer, P. (2020). Customer value co-creation behaviors and

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Saldanha, N., Mulye, R., & Rahman, K. (2018). A strategic view of celebrity endorsements

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https://doi.org/10.1080/0965254x.2019.1566268

NESTO. (2020). Who We Are. Nesto. https://nestogroup.com/about-us.