nestle product case study

How Nestlé Became The World's Largest Food Company

Table of contents.

Let’s trace the origins of Nestlé and its exceptional legacy of 150+ years that have led it to become a company with:

• Market cap of $326.07 Billion as of Feb 9, 2023
• Over 2000 brands worldwide
• Monumental presence in 186 countries
• A workforce of nearly 276,000 employees
• Revenue of CHF 87.1 billion in 2021
• 354 factories in 79 countries

Grab a Kit Kat or sit back with a cup of freshly brewed Nescafe, and let’s go back to 1866 , the year it all began.

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A Merger Lays The Foundation Of Nestlé’s Success

The story of Nestlé begins with Henri Nestlé of Vevey, a namesake of the company, and unsurprisingly, its founder. But it is also linked with two brothers, Charles and George Page, who were located far away in America at the time.

While the world of business was not a global village back then, perhaps it was fate, the love for milk, or sheer successful marketing strategy that brought the businesses of the two together to form the Nestlé we see today.

The creation of Anglo-Swiss Condensed Milk Company

Charles Page was a U.S. consul who visited Switzerland and became intrigued by its Swiss cows and beautiful meadows. The country had been a primary milk production center since the 19th century due to its available resources of high-quality cows and attracted people with a passion for milk production from far and wide. 

Page was one such individual with a different aspiration: he wanted to create condensed milk. Easy to store and transport, condensed milk, according to him, was the next big thing in the entrepreneurial world. 

Therefore, with his brother George Page, he created the Anglo-Swiss Condensed Milk Company and opened the doors of the first-ever condensed milk factory in Switzerland, in the town of Cham, in 1866.

Henri experiments

Meanwhile, Henri Nestlé was a local pharmacist in Vevey who loved experimenting with anything and everything he could get his hands on. This meant creating incredible food fusions was right up his alley.

During the 1860s, infant mortality rates remained a grave problem in Switzerland. As a man with 13 siblings, Henri understood the woes of infants. Yet, the turning point came when he saw that premature babies faced difficulty in consuming breast milk.

Invoking his creativity, he combined available resources and his scientific knowledge to produce “ Farine Lactee ” in 1867, an infant formula made with cow’s milk, wheat flour, and sugar.

This proved to be a breakthrough, and soon, sales increased to 1000+ cans in 1871 and more than 2000 in 1873. Two years later, Nestlé’s products could be found worldwide, including but not limited to Indonesia, Egypt, and the U.S.

As sales increased exponentially, Henri gave his company a logo symbolizing his family name that meant “Little Nest”. The logo, therefore, contained a bird’s nest.

Today, the logo has been simplified but remains its original idea and charm as an ode to the founder.

A rivalry emerges

In 1875, Henri retired, and the company was led forth by three local businessmen in Vevey. However, simultaneously, the Anglo-Swiss Condensed Milk Company expanded to newer markets in Europe, and upon discovering Nestlé’s infant formula and its success, it developed a rival product and floated it into the market.

To Nestlé, this was nothing less than a declaration of industry war, and soon after, Nestlé added a new product to its portfolio: a Farine Lactee condensed milk. Fierce competition developed, followed by price wars and predatory market strategies.

As both companies competed for a greater market share and ROI on their rival products, it did not come as a surprise when both began generating lower revenues and making losses.

The price war lasted roughly for about 30 years until the death of all three – Henri, George, and Charles.

In 1905, the current directors of the companies agreed to halt their rivalry and combine their businesses for greater market share, revenues, and expanded reach over the globe.

As a result, Nestlé and Anglo-Swiss Condensed Milk Co. was founded – that eventually became Nestlé.

Certificate for 100 shares of the Nestlé and Anglo-Swiss Condensed Milk Co., issued 1. November 1918

Key takeaway 1: leave emotion out of strategy

For many years, Henri and the Page brothers went head to head in the milk industry, expanding into European markets, creating substitute rival products, adopting predatory pricing strategies, and undercutting price benchmarks. 

All this only yielded the worst for both businesses in the form of reduced revenues, higher price elasticity of demand, and a confused clientele.

Their saving grace was the strategic decision of the directors to call a truce and join forces – shared winners over lone losers. With the main competition becoming the same company, the focus was brought back to improving operations and opting for practices the business could sustain. Resultantly, the only path now was onwards and upwards.

This means foresight, strategy, and impartial business sense take priority over emotional responses, especially in the business world.

World War I, Government Contracts, & Innovative Strategies

Most companies take a few years to establish themselves in their local markets, minimizing risks. Only once they are comfortably settled and have enough brand appeal and resources to expand do they risk entering the global market.

But Nestle is not like most companies, is it?

Henri Nestle had become a big player in the Western Europe Market, and Page Brothers were leading the way in Britain. Thus, the merger already allowed Nestle to be the go-to condensed milk brand.

From there, it was always going to spread itself and capture as much of the global share as it could, and so it did. Within a decade, this newly merged company had taken its operations around the world, establishing factories in the UK, Europe, the United States, and Asia.

An unexpected opportunity

WWI broke out in 1914, and the scale of disruption around the globe was huge.  Almost every industry was affected. Some thrived and grew, but many collapsed or barely survived.

Nestle also faced an initial period of hardship where it was difficult to maintain its supplies due to severe shortages, and maintaining a smooth distribution network in Europe was near impossible. Hence, most of their supplies ran out of catering to the needs of locals.

However, the war presented a unique opportunity. The demand for milk shot up, and consequently, governments around the world sought contracts with major milk producers and distributors.

Nestle acquired several of these contracts that enabled it to not only come out of the difficult situation it was in but also rapidly expand its operations. It developed most of its factories in the US, where supply and distribution were easier, and recovery began. In fact, by the end of the war, the company had over 40 factories in the world, nearly doubling Nestlé’s overall production.

Moving forward by embracing innovation

Of course, the circumstances around WWI were unusual and worked in favor of Nestle. But it wasn’t the only reason the firm grew at such a pace. Research and innovation had defined the companies that came together to form Nestle. Hence, the same qualities were inherited and ingrained in Nestle. At a time where global infrastructure was going through a phase of transformation, Nestle was at the forefront of it utilizing it and spreading it.

For instance, railways and steamships were the new business logistics, and they became the company’s ticket into established and untapped urban markets overseas. Print media became the main face of modern marketing. Nestle cleverly capitalized on it by projecting its brand through newspapers, magazines, and billboards. The adverts focused on what made the company stand out: quality, taste, nutrition, safety, and affordability – characteristics Nestle still proudly stands by.

All while these advancements were being embraced, Nestle didn’t lose sight of what they were truly about: their products. Hence, as far as production is concerned, they continued to introduce more efficient methods in their factories, expanding their capacity and boosting quality.

Key takeaway 2: growth follows the ambitious

Both World Wars were make-or-break events. From a decrease in demand to a disruption in supply, Nestle faced all sorts of challenges. But Nestle, even before it merged, was always looking for opportunities to grow, and the government contracts gained during the war were essentially the result of it. If Nestle didn’t have its operations worldwide, it would never have captured the governmental radar. It may have survived the shortage; it may not have.

These contracts allowed the company to grow, which worked perfectly with its innovative strategies, such as tapping urban markets and marketing using print media to enhance the brand appeal and create brand affinity. This highlights the importance of being proactive and always looking for potential opportunities, even in challenging times. 

World Wars & Expanding The Product Portfolio

1918 , the year WWI finally ended.

The fighting did stop, but the unstable economic situation the world was in couldn’t be fixed easily. Nestle’s government contracts were up, and it found itself amongst the many companies facing the force of the crisis. To add to their difficulties, consumers that had shifted to condensed milk during the war shifted back to fresh milk as supply resumed.

The company went into a loss for the first time in 1921 .

Timely response

At that point, sales were down, and production costs were high for Nestle. Its operations needed an overhaul to reach sustainability. For this purpose, Swiss banker Louis Dapples was handed the task of reorganizing the company.

Not only was he able to match production and sales, but the move also helped Nestle clear its outstanding debt. Thereafter, the company spent a good part of the decade staying afloat and focusing on sustaining its operations.

More than a milk company

First milk, and then condensed milk; despite having a global reach, Nestle hadn’t really made an effort to expand its product portfolio.

Perhaps, till the 1920s , it had never felt the need to. It had been growing at a rapid pace and adding several countries to its customer base. Now, as growth stagnated and consumer demand shifted to fresh milk, something different had to be done.

Thus, they made a series of acquisitions that opened their doors to new industries, the most notable of which was the Kohler Swiss Chocolate company in the mid-1920s . Consequently, chocolate became the second most important product of Nestle.

‍ Nestlé buys Switzerland's largest chocolate company Peter-Cailler-Kohler

Alongside chocolate, the company also introduced malted milk, a powdered beverage named Milo, and powdered buttermilk for small children.

Malted chocolate drink Milo launches in Australia

The Nescafe revolution

The chocolate business was going well for Nestle, but they were yet to launch the product that would change the company’s future forever.

In 1930 , the Brazilian Coffee Institute approached the company with a unique problem. Brazil had a huge surplus of coffee, but there was no real demand or use at the time. Nestle spent the next 8 years researching and experimenting with products to develop from this coffee.

While the Brazilians suggested coffee cubes, Nestle had a better idea instead.

Voila, in 1938 , Nestle launched “Nescafe” an instant soluble coffee solution, the first of its kind and one of the most popular Nestle products to date. This was later followed by Nestea, another incredibly popular product that continues to drive the tastes of many across the globe today.

Nestlé launches NESCAFÉ in Switzerland on 1 April 1938

The USA again becomes the helping hand

There was immense potential in Nescafe, but at the same time, Nestle began to experience the severe impacts of WWII even before it broke into a worldwide conflict. The company’s revenues nosedived from $20 million in 1938 to $6 million in 1939 .

Although Switzerland remained neutral in both world wars, the situation in Europe was highly volatile, and business could not be conducted normally. Again, Nestle looked towards America by shifting its base of operations to Connecticut, far away from the conflict.

Their previous experience during WWI had allowed the company to form healthy relationships with the states, which helped them settle in. Unfortunately, the USA could not stay away from the war for too long and joined the allies in 1941 .

For Nestle, it was a complete blessing; Nescafe became a staple food for the US military as it was easily preservable, and the taste has already become a hit. Hence, without having to spend a fortune on advertisements, the coffee product penetrated worldwide, and funnily, its first brand ambassadors were allied soldiers.

Nestle sent tons and tons of Nescafe to the frontlines and managed to turn around their sales completely. From making $100 million in 1938 to reaching up to $225 million in 1945 .

Key takeaway 3: diversify and innovate

The end of WWI and the economic depression brought by it made life difficult for almost every business, including Nestle. Plus, the fact that customers preferred fresh milk instead of condensed milk meant that Nestle found it difficult to sustain its business. 

Customers’ demands and preferences, as well as the market scenarios, can change drastically over time. Nestle learned that they needed to be flexible enough to adapt and bold enough to take risks. Otherwise, they will be left with no choice but to shut up shop. 

This is when the milk company gradually began expanding by introducing new products and exploring new markets. It, in turn, allowed the company to grow despite the difficult situation.

Hence, companies should never rest on their laurels and try to improve consistently, be it by innovating, branching out, and increasing the quality and quantity of products or services they offer.

Growth Through Acquisitions and Diversification

The end of the world war had set the perfect stage for Nestle to take its business to the next level. Sales were at an all-time high, Nescafe and Nestea were making waves, and through military and government supports, the company had opened up new markets for its products.

On top of it, the world did not go into a similar depression like WWI. Instead, it marked a period of stability and peace, one which firms everywhere looked to capitalize on. Likewise, Nestle did not waste any time in getting in on the action and making some very key and monumental moves. In fact, these post-war years are often termed as the most dynamic period in the company's history!

Seasoned Maggi Soups and Broadein Food Products

As the world recovered from the war, Nestle followed an aggressive acquisition policy acquiring multiple brands worldwide. The most significant name it added to its portfolio was fellow Swiss company, Maggi.

The journey for this soup and noodles company started somewhat around the same time as that of Henri Nestle. Its founder, Julius Maggi shared the same vision of serving nutritious yet convenient foods to the public.

After the war, in 1947 , Maggi went through a number of restructurings and changes in leadership. Resultantly, the best way for the company to move forward was to join hands with Nestle. Their established factories in numerous countries introduced the Maggi brand to the world, and it became a sensation. In fact, in many Asian regions, Maggi is synonymous with instant noodles.

The Magic of Maggi

Following Maggi’s acquisition, Nestle took over several other firms in the food industry, including:

• 1960 : Crosse & Blackwell, a British can and preserved food manufacturer
• 1963 : Findus, a Swedish frozen food company
• 1971: American fruit juices company Libby
• 1973: Stouffer, a frozen and prepared foods brand

With these moves, Nestle extended its product range and established a stronghold in the preserved foods industry.

Developing new & improving existing “convenience” products

While Nestle spread its wings by bringing other brands under its umbrella, it did not lose sight of the products it developed itself.

For instance, the Nescafe coffee, which had been a huge success during the war, continued its astonishing path upwards. From 1950 to 1959 , its sales almost tripled, and with the development of an anti-freeze version in 1966 , its sales quadrupled in the next decade.

Simultaneously, Nestle also worked on launching new products. In 1948 , it further embedded itself in American households with Nesquik, a chocolate powder that would instantly mix in cold milk. 

Owing to the product’s success, they even introduced the Nesquik Bunny to win over both adults and children.

During the same time, Nestle rebranded its infant cereals as Cerelac while launching an extensive range of canned foods under Maggi.

Diversifying beyond the food industry

By the 1970s , Nestle had well and truly occupied a dominant position in the food industry. It was now time to step out of the comfort zone and venture into new industries.

The big break came in 1974 when Nestle made a move for a Parisian hair care company, L'Oréal. Established in 1909 , this company had gone from making hair dyes to a full range of cosmetic care products. It has also formed a loyal customer base in France.

With big plans, Nestle offered the family owners of L'Oréal a 3% stake in Nestle in return for a 50% share. The offer was too attractive to refuse, and the two companies entered into a new partnership. This merger reaped multifold returns for both parties, and by the 1980s , the brand was the leader in its industry.

The cosmetic arena wasn’t the only one Nestle aimed to capture. There was an economic slowdown and general volatility between the French and Swiss markets. The price of cocoa and coffee went up more than three times. Nestle decided to take a risk and leap into waters it had never been in before.

In 1977 , it also became the owner of the American pharmaceutical company, Alcon. This, too, was a success with the brand operating in 75+ countries and being sold more than twice that number.

Merger to remember & the future of coffee

Nestle never looked to slow down despite its numerous acquisitions and diverse brand offerings.

In 1984 , it offered a mind-blowing $3 billion to buy out the food company, Carnation. Many believe this to be one of the largest acquisitions outside the oil industry – at least at the time. The scale of the deal was such that it took a year for it to be approved and finalized.

It wasn’t just being in the same industry that sparked Nestle’s interest; it was also the fact that Carnation had a diverse portfolio, including a profitable pet food brand, Friskies, and Contadino tomato products.

Nestle also added UK confectionery company Rowntree Mackintosh to its list of acquisitions in 1988 , giving it ownership of popular chocolates, Kitkat and Smarties. In the same year, it also included Buitoni-Perugina, a major Italian pasta and confectionery company to its mix.

Alongside the mergers, Nestle was also actively working on making a comeback with its coffee products. Thus, in 1986 , it rolled out Nespresso, a premium version of its coffee, different from the previous freeze-dried budget version. The idea behind it was simple: present a DIY system for any person who wanted to enjoy luxury coffee.

Key takeaway 4: seek opportunities in both new and existing industries

Many firms that plan to diversify their portfolios lose grip on their main industry. Nestle wasn’t one of them. Its initial strategy for growth post-WWII was to cement its hold in the food industry with a series of acquisitions and new product offerings. Then, it made its move in other industries while still improving on its basic offerings of food, coffee, and chocolate-related products.

Nestle grew exponentially by tactfully merging and acquiring companies it thought would add value to its brand. This paid off handsomely and turned Nestle into a force to be reckoned with. It highlights the need for brands to enhance their value offerings, using whatever means they have at their disposal, right from diversifying to collaborating with others.

International Force - Nestle's Global Strategy

With the fall of the Berlin wall in 1989, markets in Central and Eastern Europe, as well as China opened up. Trade barriers disintegrated, liberalization picked up the pace, and economic markets around the globe started to integrate well.

This proved to be quite beneficial for Nestle. There were new diverse markets to expand to and favorable policies that encouraged them – not that they needed any second invitation. 

Onwards & upwards with tactful acquisitions

From the late 1990s to the late 2000s, Nestle went on an aggressive acquisition spree and acquired the following companies:

• San Pellegrino group , the leading Italian mineral water business, in 1998 paved the way for Nestle to launch Nestle Pure Life and lead in Europe while making a way into developing countries worldwide.
• Spillers Petfoods in 1998 enabled Nestle to cement its position as a key player in the pet food business around the globe and Europe in particular.
• Ralston Purina , U.S.'s pet food business, in 2002 and merged with Nestlé Friskies Petcare, creating a market leader in the pet care industry, Nestlé Purina Petcare.
• The U.S. ice cream business merged with Dreyer's in 2002, establishing Nestle as the leader in the U.S., the world's largest ice cream market. 
• Movenpick Ice Cream in 2003 to complement Nestle's super-premium ice cream brands portfolio in North America and Italy.
• Delta Ice Cream in 2005 as Nestle's realized that the ice cream business was a profitable opportunity and the company could make inroad in the growing Greek and Balkans ice cream market.
• Chef America Inc in 2002 as Nestle continued with its horizontal integration and expanded into the frozen foods market, which was growing.
• Jenny Craig and Uncle Toby's in 2006 as Nestle wanted to stay true to its commitment to nutrition, health, and wellness and reinforce its presence in the U.S., the world's largest nutrition and weight management market.
• Medical Nutrition division of Novartis Pharmaceutical in 2007 as it was complementary to Nestle's Healthcare Nutrition Business and enhanced Nestle's capabilities to cater to the needs of its customers with special nutritional requirements.
• Henniez in 2007 to augment its position in the competitive Swiss bottled water market, leveraging the solid industrial capacity and distribution network of the company.
• Gerber , the iconic U.S. baby food brand, in 2007 became the number 1 player in the U.S., the world's largest baby food market, transforming Nestle Nutrition into a global leader.

A number of other partnerships were also made, such as the one with Belgian chocolatier Pierre Marcolini , helping Nestle augment its position in the food and nutrition industry while allowing it to diversify in health, wellness, and beauty.

Now, why did Nestle do that?

The answer is to remain attuned to the changing consumer tastes and remains ahead in a market that never stays still.

Sure, continuous innovation is essential, but Nestle didn't just rely on that and continued to acquire businesses and benefit from synergies to become the undisputed leader in the business world.

All this while, Nestle has remained true to its roots and continued to delight its customers worldwide.

Realizing that with expanding its global footprint, there was bound to be an array of issues that it needed to deal with effectively, Nestle launched a Group-wide initiative called GLOBE (Global Business Excellence) .

The primary purpose behind this initiative was to harmonize and simplify business processes and empower Nestle to make the most of its competitive advantage while alleviating the risks and drawbacks.

Key takeaway 5: growth & diversification through acquisition

From San Pellegrino in 1997 to Henniez and Gerber in 2007, Nestle's relentless strategy to acquire an array of businesses in different markets, ranging from pet care and baby food to ice cream and bottled water, strengthened its overall position and breathed new life into the company.

Nestle not only wanted to expand to new product lines but also become the market leader in all of them, in different parts of the world. The fastest and most effective way to do just that was through strategic acquisitions. 

In an ever-evolving market, staying still or focusing solely on a select few activities is risky for large businesses. The key, at times, to grow is to embrace an external growth strategy by acquisitions in different industries with distinctive lines of business.

Commitment To Innovation

Nestle stays firmly committed to its goals of helping people, families, and pets around the globe live happier and healthier lives. From meeting the ever-evolving needs of the modern consumer to providing safe and premium-quality of food on-demand, Nestle does it all.

However, it understands that dramatic shifts are happening in the market with consumer demands dynamically changing, new entrants offering endless choices, and people living and shopping in ways never seen before.

Winning in such an environment requires disruption and a hybrid-growth model. No one understands that better than Nestle, and here’s how it is driving value from its base portfolio while embracing new ventures to scale up.

Nestle: 150-year-old start-up innovating from within

Unlike other business entities that outsource the innovation part and fail to prepare for the future, Nestle has strategically decided to combine its scale and capabilities with the mentality and speed of a start-up.

InGenius , Nestlé's employee innovation accelerator, is the ultimate platform that encourages intrapreneurship within the company. Internal start-ups within the company are launched , and employees are encouraged to think big and creatively.

Moreover, Nestle’s global R&D accelerator program brings together scientists, students, and employees, empowering them to come up with new innovative products.

Lean designs, fast prototyping, quick testing, continuous hustling, and room for big risks make the incubator program a success. The goal of the internal start-ups is to help promptly develop new product lines from scratch within 9 months, paving the way for the future of food.

What’s more is that employees are given challenges to solve, ranging from improving the quality of food to helping achieve the net-zero target. On top of this, Nestle also helps young social entrepreneurs, outside its fold, by offering them holistic support, mentorship, and access to its R&D and innovation experts by partnering up with Ashoka – an organization that identifies and supports social entrepreneurs.

Rethinking & reinventing

To better tap into today’s consumer trends, Nestle goes the extra mile to revive the brands with modern innovation.

It does this by introducing new varieties of products and adding unique flavors to attract new customers and retain existing ones. For instance, in 2017 alone, Nestle launched 1000 new products. Yes, that’s right!

From bringing in new flavors of juices and milk to launching frozen organic meals and non-dairy desserts, among others, it tries its best to exceed its customers’ expectations.

Enhancing capabilities

Fueling growth through innovation and improving operational efficiency are two key components of Nestle’s value creation model.

While innovation is considered everyone’s job at Nestle , increasing operational efficiency is also stressed.

Each and every aspect of the business, be it hiring people, using data analytics to make decisions based on logic, optimizing supply chains, or deploying manufacturing solutions, is reviewed and revamped to increase efficiency and deliver desired business outcomes.

Future of food

Nestle, together with Swiss academic and industrial partners such as ETH Zurich, Ecole Polytechnique Fédérale de Lausanne (EPFL), and companies Bühler and Givaudan, announced a joint research program, Future of Food , that will help develop nutritious, tasty, sustainable, and trendy food and beverage products.

It's just another example of Nestle leveraging innovation and partnerships to move forward. Plus, it highlights Nestle’s commitment to providing healthy food while doing right by the environment.

The future is healthy, sustainable, and personalized

Nestle is actively working on providing healthier diets to people worldwide. It's even reformulating its popular products such as Kit Kat and Maggi, among others, to reduce the sugar, salt, and saturated fat in them while also transitioning its brands towards organic.

In addition to this, it is actively working towards ensuring its supply chains have zero environmental impact and reducing its carbon footprint by changing its plastic packaging.

Nestle has announced that it will phase out all packaging that’s not recyclable by 2025 and ensure the packaging it uses is eco-friendly.

Last but not least, Nestle, in its quest to stand out and scale, is emphasizing the need to please customers in every way possible. It aims to do that by delivering customers exactly what they want, how they want it, and in the taste, and shape they want it.

Meeting the needs of consumers on an individual level, according to Nestle will make all the difference. Hence, it is investing in it. Nestle acquired a start-up in UK, Tails.com, which provides tailored diets to dogs on a monthly basis based on age, breed, and weight among other factors.

Key takeaway 6: innovate, innovate, and innovate

Ascending to the top is one thing, but remaining at the top is the real challenge. Nestle’s strategy of launching incubators, experimenting with products, enhancing capabilities, and thinking ahead to create a new future highlights the importance the company places on innovation.

Nestle never hesitates to be bold and go out of its way to innovate to accelerate its growth and achieve scale. It realizes the value that can be derived from innovation and hence, leaves no stone unturned in thinking out of the box and putting its money where its mouth is.  More than anything else, this fundamental strategy has helped the company dominate and remain a customer favorite.

Nestle In The New Normal

Nestle: the multi-national company that adapts

A vital company in the challenging times of Covid-19, Nestle made many changes in its processing and manufacturing processes to continue supplying good food. As supply chain challenges intensified, Nestle focused its efforts on streamlining the supply chain end-to-end, from sourcing supplies to logistics. 

Nestle had 8.1% organic growth in the first half of its fiscal year 2022.

Nestle: the best employer

Making the health and safety of its employees a priority, Nestle implemented enhanced safety measures on and off its premises, including factories, distribution centers, labs, and offices.

Nestle responded to Covid-19 effectively and made sure its employees are protected and motivated by:

• Allowing working from home 
• Restricting travel and exposure to the virus
• Introducing the best hygiene practices
• Implementing effective social distancing measures
• Giving a special 14-day COVID-19 leave
• Offering financial support in the form of loans

Nestle: the company that gives back to the community

Nestle extended a helping hand to those in need in the crisis. It provided holistic support to medical institutions, food banks, food delivery organizations, and relief organizations in the local communities who are on the frontline. 

Not only did Nestle donate essentials such as food and bottled water but also money. Nestle joined forced with the International Federation of the Red Cross and Red Crescent Societies (IFRC) and donated  CHF 10 million . Plus, in order to speed up the vaccination and ensure fair distribution of vaccines, it partnered up with COVAX and donated  CHF 2 million. 

Key takeaway 7: stay resilient 

There’s no doubt that the Covid-19 pandemic disrupted the global markets and adversely impacted Nestle in ways more than one. However, Nestle managed to survive and thrive by continuously adapting, being proactive, and striving to do right by the people and the communities it served, as evident from its increased market share and growth during the period.

Nestle in a nutshell

Nestle products are recognized, consumed, and valued in all corners of the world. It is a company that has ingrained itself in the day-to-day life of people and continues to raise the bar higher. From innovation, people management, and a long-term strategic approach to the quality of products and services, social responsibility, and competitiveness, Nestle ticks all the boxes.

Here are the four main lessons derived from the growth of Nestle from a relatively small Swiss-based company established in 1866 to one of the most successful, admired, and profitable multinational companies in the world:

Key takeaway 1: globalize but also localize

A company as big as Nestle, which operates in almost all countries worldwide, has achieved success by localizing its offerings and catering to the needs of each individual market.

Sure, it could have made generalized global strategies and campaigns, but it took the difficult path by localizing everything from sourcing, product planning, production, marketing, and even its brand strategy.

It highlights the importance of being customer-centric regardless of who you are as a company and where you operate.

Key takeaway 2: innovate – change is an opportunity

Whether it be changing consumer demands, the evolving marketplace, or crisis situations, Nestle has never stopped innovating. Sure, it has paid the price of a few campaigns gone wrong, but one thing that it has been relentless at is continuing to strive to be a step ahead.

Nestle does it all, from committing to sustainability to coming up with new creative ways of providing more value to all stakeholders. It serves as a lesson for brands in this modern digital age. You can only survive and succeed if you innovate. Period.

Key takeaway 3: grow through acquisitions

Nestle has over 2000 brands. Yes, that’s right. Nestle has rapidly grown, gained a competitive advantage, increased its market share, achieved synergies, and enhanced efficiency in its business by acquiring companies.

It actively looks for potential acquisition opportunities and doesn’t hesitate to take risks. This showcases that if you want to grow as a company, you need to broaden your horizons and partner up with others. Foresight, strategic decisions, and impartial business sense are critical - now more than ever. 

The external growth strategy has worked wonders for Nestle by allowing it to expand into new industries and distinctive production lines - all of which have contributed immensely to its growth over the years. Simply put, if you can’t beat them, just join them, or well, in Nestle’s case, buy them.

Key takeaway 4: importance of brand & values

As a company, your values are bigger than your revenue. If you truly focus on and stick to your values, you can attract consumers and scale your company. Nestle has done just that by not only saying but becoming the “Good food, Good Life” company.

It firmly abides by its core principles of “ Unlocking the power of food to enhance the quality of life for everyone, today and for generations to come .”

Every decision that is made, every product that is launched, every customer that is served, is served to shape a better and healthier world. No wonder Nestle has become a global icon from a local favorite.

Nestle Case Study: How Nestle’s Marketing Strategy Helped Them Grow as a Brand-2023

How many of you can answer this?

What is one common thing among Nescafe, Caregrow, KitKat, and Maggi?

Any guesses?

Yes, they are world-renowned brands, are familiar names in every household, and are products you must have consumed in your life at one point.

Anything other than these?

Yes. All these belong to one and only Nestle.

Be it in the fresh smell of hot coffee, a short break, or a bowl of tasty noodles- we cannot deny that all of us have enjoyed the awesomeness of Nestle’s products.

The brand has come a long way, crossing so many hurdles and achieving success, and it keeps growing.

Today, nestle is a brand that everyone is familiar with and uses in their day-to-day life.

Curious to know how?

In this Nestle case study, we are discussing everything about Nestle company, the marketing mix of Nestle, nestle competitors in India, marketing sales promotion techniques of nestle, and much more.

Nestle owns more than 2000 brands, from global stars to local ones.

How did Nestle achieve this level of success?

The brand has been in the market for more than 150 years, but many companies got this opportunity but failed. Nestle survived.

What is the secret of Nestle’s success?

This Nestle case study shows you a glimpse of nestle strategy and what digital marketing and social media strategies they followed that led to achieving this success.

So, let’s start by understanding a bit more about Nestle as a company.

Nestle had come a long way from when it entered the market by selling infant food in the 1860s with a motto to reduce child mortality rates.

Gradually, it became a renowned name in the wellness, healthy food, and pet care industry with its evergreen tagline, “Good Food, Good Life.”

Now, you must be thinking that how did Nestle reach this position? How can a company build a legacy which is so powerful that it has stood still since its birth?

The answer to this may lie in Nestle’s digital marketing and functional strategy.

Nestle Case study: Introduction of Nestle company

Nestle is a world-renowned manufacturer of packaged foods and beverages. It is the world’s largest food manufacturer operating in more than 186 countries and with over 2000 product brands.

The brand came to India in 1956. Since that time, from selling its first milk product in the 1960s to selling a wide variety of Nestle products in India, Nestle has grown exponentially in India.

With such exponential growth, Nestle’s umbrella keeps widening day by day. They are not only the largest food and beverage company in the world but also one of the best companies that have effortlessly collaborated with the online world and achieved immense success.

Gradually, Nestle India started making its presence felt in the FMCG sector, and now the brand enjoys a good market share in the food and beverage industry.

Being the most extensive food and beverage brand in terms of revenue, the pricing strategy of Nestle company, along with its targeting and positioning system, has played a vital role in reaching the position where it is currently.

Let us find out how it has served the Indian market with its products and services.

Nestle offers products in breakfast cereals, beverages, dairy, chocolates, nutritious foods like vending, and food services.

Popular food products like Kit Kat, Maggi, Milkmaid, Polo, and Nescafe come under Nestle’s products sold in India.

For more than 150 years, this iconic brand has been applying its expertise in Health, Nutrition, and Wellness to help its customers, pets, and families live a healthier and happier life.

However, they believe what is good today might not be suitable for tomorrow.

So, they keep exploring and focusing on pushing the boundaries to find more to experiment with foods, nutrition, and beverages.

Nestle unlocks the power of food to improve the quality of life for everyone, not just today but for generations to come.

The brand focuses on bringing more pleasure and enjoyment to the customers, how they can enable better health, and how they can make the best nutrition affordable to everyone.

Not just these, but the brand tries new ways to protect and improve natural resources.

History & Founder

Nestle was founded in 1905 by the union of the Anglo-Swiss Milk Company, set up in 1866 by brothers Charles and George Page and Farine Lactee Henri Nestle, founded by Henri Nestle in 1866.

Nestle originated in 1860 when two separate Swiss enterprises later created Nestle.

In the following decades, the two rival companies grew their businesses throughout the United States and Europe.

In 1866, George Page and Charles Page, brothers from Lee County, Illinois, USA, formed the Anglo-Swiss Condensed Milk Company in Cham, Switzerland. The company’s British operation started in 1873 at Chippenham, Wiltshire.

It was during the First World War when the organization grew significantly, and again during the Second World War, the company increased its offerings beyond its initial condensed milk and infant food products.

Nestle Case Study : Facts & Figures

Here are a few interesting numbers about Nestle that sets it apart from others.

• Nestlé is the world’s largest food and beverage company.
• The brand has 276000 employees
• Nestle has acquired 30 companies

Nestle Case Study: Nestle competitors in India

Nestle has many major customer brands like Carnation, Kit Kat, Nestle-water, and Stouffers, among others.

Thirty of its brands netted more than $1 billion in earnings in the year 2010, which makes the company a vital force in the worldwide food and beverage industry.

With around 42 % of its sales being in North America, Nestle is one of the most geographically distinct companies in the food and beverage industry. It places it in a position that helps it edge over its competitors.

Its brands are well established in a considerable market share in leading economies like U.S. and Europe.

Danone and Unilever are important competitors for Nestle. These two are giants in the food and beverage industry, like Nestle.

In 2010, Unilever posted around 26% growth in yearly profits because of its accelerated sales in the food and beverage industry, especially ice cream, frozen food, tea-based beverages, and cooking products.

On the other hand, Danone stated around a 38 percent increase because of its improved share prices. In addition, a rise in its yogurt sales also enhanced the growth in earnings.

However, nestle handles positioned itself in the market by adopting a new accounting method which aided a decline in its cost of sales.

The company could also incorporate discounts, allowances, and promotions for its retailers through sales profits rather than the marketing line.

Though its sale was lesser for a year, nestle pricing strategy helped them match its peers, which in turn, made it a famous manufacturer even though the competition was so high.

Being the world’s most popular food manufacturer, nestle has intense competition with its rival company, Unilever.

Unilever has around 1,49,000 employees and operates in 160 countries, with its headquarters in London for food, home, and personal care.

The company is trying hard to beat Nestle in terms of the quality of their product, which has made Unilever the second company in the Western European ready meals market with a market share of around 8.6%, i.e., 0.3 points behind the iconic Nestle.

Nestle’s Target Audience and Products for Each Segment

The unique thing about Nestle is that it offers a wide range of products that covers audiences of different ages, from 2-year-old to working professionals.

Here’s a breakdown of Nestle’s Target Audience and the products meant for them.

• Target Audience
• Working Professionals
• General Audiences
• Koko Krunch, Caregrow, Lactogrow
• Sunrise, Nescafe
• Maggi, KitKat, Milkmaid

Everyone, especially coffee lovers, will know how Nescafe is a big hit among working professionals.

Nestle guarantees that Nescafe is the only coffee that would keep professionals fresh throughout the day, and who does not want to feel fresh?

Regarding kids, parents blindly trust the product “Caregrow” by Nestle. The product consists of cereals to keep young kids healthy.

However, nestle has several other products like KitKat, Milkmaid, and Maggi for the general audience.

It is how Nestle has designed something for everyone in India. In the coming section, we will dig into how Nestle has advertised itself and its products in the digital world.

Nestle’s Digital Marketing Strategies

By now, you must have understood that Nestle is the world’s largest food and beverage company in terms of revenue. So, it might be basic information for many of you.

But what if we say Nestle always tries to be one step ahead regarding marketing strategies and policies?

It has always focused on the most updated marketing ways no matter, whether it is digital marketing strategies or offline strategies.

Nestle’s marketing strategies will teach you to build marketing strategies that work and get a positive response from customers.

Let us start with Nestle’s Digital Marketing Strategies that must follow if they want to succeed as a brand.

Partner with influential celebrities

Nescafe, a product of Nestle, collaborates with celebrities to put forward their message and create more noise around their brand.

A few years ago, they announced Bollywood actress Disha Patani as their brand ambassador.

Recently, they launched a campaign with famous content creators called “Karne Se Hi Hona Hai,” which means “Only doing will make it happen.”

They created this campaign during the Covid Pandemic to inspire people and encourage them to keep working hard towards their dreams no matter their situation.

Through this campaign, they targeted the youth of India and asked them to dream, act, and achieve success.

• Run campaigns that foster connections and bring customers together

An ordinary 37-year-old guy named Arnaud, with 1,2000 Facebook friends, was challenged by the company to catch up with his friends over a cup of coffee.

So, he filmed these meetings and turned them into a 42-minute online video documentary. During the sessions, Arnaud enjoyed a cup of Nescafe with his pals.

The documentary was a big hit on social media. It got almost 8 million views on Facebook, around 63,050 likes, 4,850 comments, and 5,550 shares. 

The Facebook Page of Nescafe saw an increase in the number of fans by 400%.

Fans were excited by the documentary and wanted to know how to turn their online friendships into real-life relationships.

As a reaction, it created the “le Defi Nescafe,” a Facebook campaign to allow winners to reinvent the same experience.

More than 26,000 people applied, around 19,000 liked it, and nearly 1,725 shared.

Instantly, Nescafe became an online sensation by marketing itself as an item that stimulates connections and friendships.

2. Localization of Products

Localization is adapting an organization’s products to the local market. Nestle has gone huge on localization in various markets where it now manages.

For example, consider Japan, where the organization’s primary foray was through coffee-flavored chocolates.

Japan is traditionally a tea-drinking country, and the company established these candies so that kids could also get to know the taste of coffee.

Later, it introduced Nescafe and KitKat, and what happened is history.

3. Content Marketing

Nestle has created many video content on every brand’s YouTube channels. The content ranges from informative “how-to” videos to cooking tips to better insights on using the right products.

For example, the “Meri Maggi” has more than 530 videos with more than 5,71,000 subscribers.

Though video content is an expanding channel in Nestle’s marketing strategy, it has recognized other avenues to share relevant information with its consumers.

4. Out-of-Home Advertising

Nestle’s brands, including Maggi, Milo, KitKat, and Nescafe, use different ways to grab customers’ attention.

Whether benches, hoardings, or banners, Nestle’s brands have made it to the limelight for their contextuality and creativity.

What are the advantages of using OOH ads? First, most people correctly receive these ads. They are worth sharing.

People can take photos online, send them to their friends or relatives, and even marketers discuss them.

In addition, with the help of OTT, they can reach many people at a low cost.

Also, Nestle’s marketing strategies are exceptional and generate some customers.

5. Co-branding

Have you ever heard about Android KitKat?

A few years back, Google and Nestle united and invented an Android KitKat operating system.

Nestle was facing a new scandal with their pet product and wanted to capitalize on the image of Google. This movie created a buzz and surpassed the crisis.

Lately, nestle signed another deal with Starbucks to kill two different birds at a time.

First, the brand entered the new product development stage-i.e., roasted beans- and improved its brand by discovering a wide range of Starbucks Nespresso Capsules.

Did you understand how co-branding helped Nestle?

Co-branding is great for stepping into a new market and widening your reach. This marketing benefits startup that wants to create brand awareness or launch a new item.

It would help if you found companies that complement your products and collaborated with them to run co-branding promotional ads.

Nestle – Challenges Faced

Undoubtedly, Maggi was the most popular instant noodles brand in India. The brand had established its presence in India’s food industry, but suddenly it became controversial.

State food regulators stated that Maggi contains Monosodium Glutamate and lead above the recommended limits, which were dangerous, especially for kids.  

When nestle encountered lab results, it said that they had a world-class quality control procedure and that their products were safe for consumption.

Ultimately, the National Food Regulator FSSAI ordered to ban on the selling of Maggi, including product recall.

Consequently, various state governments imposed a temporary ban on selling Maggi noodles in a few states. As a result, the future of the company suddenly started looking dark.

Another acquisition of Nestle by the critics was they accused that the brand discouraged mothers from breastfeeding.

They showed that their baby formula is much healthier than breastfeeding, although they didn’t have any proof to support this.

It resulted in a boycott of Maggi for the first time after its launch in 1977 in the United States and slowly spread to Europe.

Several reports have acknowledged the widespread use of child labor in Cocoa production, slavery, and child trafficking, throughout the Western African plantations on which Nestle and other important chocolate companies depend.

As per the 2010 documentary, The Dark Side of Chocolate, the kids working are usually 12 to 15 years old. Nestle faced criticism from The Fair Labour Association for not properly checking.

Different Campaigns by Nestle 

• Ask Nestle Campaign

In this campaign, Nestle India launched a digital tool, NINA, which stands for Nestle India Nutrition Assistant on AskNestle, which used Artificial Intelligence to offer real-time nutritional information on the foods we consume.

In addition, it assisted Indian parents in designing a nutritious customized meal plan for their kids below 12.

This campaign by Nestle was India’s first artificially intelligent assistant that permits one to find nutritional information for kids.

So, this is how Nestle India set its foot on digital fronts and started driving organic traffic and improved overall engagement compared to competitors.

2. #WeMissYouToo Maggi Campaign

Maggi suffered a massive loss after it got banned as Maggi contained a high amount of Monosodium Glutamate (MSG) and lead content- more than what is allowed.

It was hard for them to hope for a comeback, but Maggi did their best and experienced huge sales. As a result, the price and volume of Maggi are now much more significant than before.

How did they do so?

They did so through their different marketing campaigns. One among them was the #WeMissYouToo campaign.

In addition, they published a few videos showing how people are kissing Maggi and how their life was better with Maggi.

Videos showed how Maggi has been a staple food for many and how its absence had affected their lives. 

In campaigns, characters addressed Maggi as “yaar” or a “close friend” who is always there for them when in need. 

Therefore, they considered Maggi’s return as a huge celebration that brought people’s life to normalcy.

3. A Campaign for kids: Poora Poshan Poori Tasalli

Nestle Caregrow started this campaign in 2019. The campaign targeted couples living in the cities who had kids between the age of 2 to 5 years.

India is where parents are very concerned about their child’s health and nutrition right from birth. Nestle kept this in mind and decided to portray this care through its campaign. 

The brand portrayed how Indian mothers worry about their kids’ proper nourishment.

The brand came up with a new product, Caregrow, which controls a child’s hunger and offers all the essential nutrients for enhancing the child’s immunity and overall development.

4. Celebrate the Breakers- KitKat campaign

Across the world, people consume around 12 billion KitKat chocolates every year.

It is one of Nestle’s most famous chocolate products available in India. The company also released “KitKat Senses, a premium “slow-whipped” chocolate.

Nestle sought to influence Instagram to support its “Celebrate the Breakers” campaign by raising awareness and message association among enthusiastic 15- to 34-year-old Instagram followers.

Nestle came up with a new worldwide advertising campaign that takes a different approach altogether with a famous slogan, “Enjoy a break, enjoy a KitKat.”

“Celebrate the Breakers” was a new idea that identified the different forms of breaks that generally “breakers” take.

The animated movies showed KitKat chocolates are the best for enjoying a break in life.

Instagram was the appropriate platform for Nestle to showcase this idea graphically.

The brand posted a series of pictures with the hashtag “# mybreak over seven weeks ,” showing how people enjoy different types of breaks, like sleeping at their workplace, enjoying a party, or listening to their favorite music.

The images of KitKat match efficiently with its customers, as Instagram is a place where people share their daily moments and experiences.

Future Plans of Nestle

Nestle planned to invest Rs. 5,000 crores in India in the coming 3 ½ years, as per Mark Schneider, the company’s CEO.

The FMCG company, which has nearly 2,000 brands across the globe, believes that this initiative will help Nestle to improve its core business in India and enjoy new growth opportunities.

It marks the brand’s most significant investment in India since the year it started manufacturing.

Nestle is renowned in food, nutrition, health, and wellness.

Its competitive strategies mainly focus on overseas direct investment in ready-to-eat, dairy, and other food businesses.

Though there is rising competition, Nestle has remained on top for a long.

It maintains its dominance by balancing sales between high-risk and low-risk nations.

Over the years, Nestle has proven itself as a leader in the food and beverage industry with product innovation and innovative marketing strategies.

It creates campaigns that are memorable, relatable, and share-worthy.

As it is moving toward developing a solid presence in the future, digital marketing will play an essential role in the future growth of Nestle.

As Nestle continues to follow its values, mission, vision, and purpose, it will continue to grow. 

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Table of Contents

Learnings from nestle marketing strategies , 10 key takeaways from the nestle marketing strategy.

The mother bird feeds its two young nestlings, and below comes the 'Good Food, Good Life' slogan. With a US $303 billion value, the leading health, nutrition, and wellness company– Nestle, stands out in the market with strong customer loyalty. It is the world's 22nd most valuable company by market cap. The well-crafted and consistently implemented Nestle marketing strategy has helped the brand cater to the needs of its consumers and their families worldwide, helping them live healthier lifestyles. Learn the Nestle marketing strategy and carve a distinguished presence in the market.

Discover 10 important marketing tactics by exploring the Nestle marketing strategy. 

1. Appeal to Every Consumer with Multiple Price Strategies 

With an aim to be affordable for the masses, the Nestle marketing strategy incorporates multiple pricing tactics. 

Nestle KitKat Sizes with Different Prices

If you go through any of Nestle's products, say KitKat or Maggie, you will realize that they offer several packaging options. Thus, targeting different income groups, Nestle appeals to all. Its mini packs are loved by people living alone and those with a low income. Nestle's statistics reveal that a chunk of its revenues comes from its beverages—particularly premium Nescafe.

Key Takeaway: Opt for a multiple-price strategy to capture a wider audience and be available for all. With set market prices, you generate high sales with low earning margins. However, with premium products, you get high returns, but the low sales risk stays attached. Strike a balance between value-based and competitive pricing strategies to stay afloat.

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2. Having a Multifarious Portfolio Lowers Risk 

Thriving the tough competition is a challenge, especially in the FMCG industry. Nestle has been wisely using product diversification to survive with successful results.

Nestle Products

For instance, on the detection of a harmful ingredient, Maggie was banned in India. Nestle chose to go for a diversification spree; they revamped Maggie and added several more products to its portfolio. The company smartly introduces horizontal product diversification whenever it hits a wall. 

Maggi Products

From coffee to milkshakes to other beverages, breakfast cereals, seasonings, infant foods, soups, chocolates, refrigerated foods, and pet foods, Nestle offers a wide range of products. 

Key Takeaway: With a diverse portfolio, you can lower risks and enhance revenues. 

3. Product Mix Strategy Attracts Cost-Conscious Prospects

Nestle benefits from its large product line by employing a product mix strategy. It often releases buy-one-get-one price promotions, special offers, discounts, deals, and giveaways. 

Bundle deals are perfect for introducing a product or marketing unpopular items. The Nestle marketing strategy adopts bundle deals from time to time, often during festive seasons.

Key Takeaway: A product mix strategy allows you to increase the visibility of your low-growth products and make the premium ones appear affordable. It also helps you sell low-demand stock.

4. Set Consistent Goals 

With a clear vision, Nestle has been able to create a special space for itself for over 150+ years. The company doesn’t deviate from its original mission– Good Food, Food Life. Back in the 19th century, when Henri Nestlé studied the rise in infant deaths, he introduced nutrition-boosting baby formula. 

When women entered the workplace, Nestle launched instant meals. Even today, the brand targets everyday kitchen challenges and strives to improve the quality of life. 

Key Takeaways: A strong commitment to goals gives you a competitive advantage in the market. Being consistent in your message while solving the grievances of the people can help you gain brand loyalty.  

5. Try Product-Driven Advertising When You Have a Large Product Line

Although many brands prefer a customer-centric strategy, the Nestle marketing strategy is largely product-based as it has an extensive product line. 

For instance, Nestle’s KitKat advertisements are not limited to any age group. The brand presents the product as a light snack and rarely uses demographics to personalize the advertisements.

Key Takeaways: Brands belonging to the FMCG industry must opt for product-driven advertising to increase the visibility of their diverse product line.

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6. Localize Your Products 

Nestle efficiently adapts its products to the local market. For instance, in Japan, the company markets coffee-flavored candies. Since Japan is traditionally a tea-drinking nation, Nestle introduced these candies so that kids could develop a taste for coffee. Later it introduced Nescafe and KitKat, and they were widely accepted. Today, Japan has 300+ KitKat flavors. 

Nestle also localizes its products for Indians by introducing Maggi Atta Noodles, Maggi noodles without garlic and onion, and the Maggi Special Masala. 

Nestle Localized Products

Key Takeaways: Localization is a crucial part of business strategy that ensures the satisfaction of a wider customer base. 

7. Maintain Brand Equity With Consistent Brand Image

The more recognizable the name of a brand, the higher your brand value. Nestle has exceptionally strong brand equity as it focuses on its product quality and consistent brand image in its packaging.

The color red has been associated with KitKat for ages. Although the company once tried to change the color to blue in the 1990s, it didn’t work. They changed it to the classic red. 

Key Takeaways: Brand equity helps you earn customer loyalty and creates your unique identity, giving you a competitive advantage.

8. Co-Branding Comes With Profit

Haven’t you come across Android KitKat and Nespresso Capsules? The Nestle marketing strategy also incorporates co-branding as and when needed.

Nestle collaborated with Google and launched an operating system named Android KitKat. The brand was facing a pet product scandal, and this move overshadowed the crisis.

Recently, Nestle joined hands with Starbucks and entered the new product development phase. Together they launched Starbucks Nespresso Capsules.

Key Takeaways: If your brand reaches a stagnant position, hunt for companies that complement your products and opt for co-branding promotions. It is an excellent strategy to broaden your reach. 

9. Promote Sustainability To Create a Mark 

The Nestle marketing strategy constitutes special efforts for sustainability and reducing its carbon footprint.

Recently, Nestle announced its aim to use food-grade recycled plastics. It also plans to invest over 700 million in Nescafe’s sustainable coffee production. It took the initiative to fight against deforestation.

Nestle Climate Change Efforts

Thus, consistent efforts have made Nestle a globally recognized sustainable brand. It was recognized by UN Global Compact for its efforts.  

Key Takeaways: Sustainability imprints a positive impact on your brand. The efforts help you take on a fair share of ethical responsibility while subtly shifting environment-conscious people’s minds toward your brand.

10. Digital Marketing is a World of Success

Nestle posts quality content on each of its brands’ YouTube channels. It has informative ‘how-to’ videos, cooking tips, product insights, and more.  

Its ‘Meri Maggi’ page gained up to 571,000 subscribers. The Nestle marketing strategy relies heavily on video content. It also has other established avenues for sharing information, such as the search engine optimized Nestle child nutrition website.

It serves as a comprehensive guide on nutrition for mothers. It also features a community aspect in addition to the expert advice section. 

Nestle Child Nutrition Website Content

Nestle also employs consistent efforts on Instagram, Twitter, and Facebook. It runs campaigns and posts eye-catching images and videos while also benefiting from the influencer community.

Key Takeaways: Leverage the power of digital platforms for marketing your business. It is a great way to engage your customers and help them beyond selling products.

The Nestle marketing strategy has enough in store for startups and established brands to learn from. Want to learn more? Enroll in our Digital Marketing Program and secure exciting digital marketing jobs in top tech companies.

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Designing Sustainable Technologies, Products and Policies pp 447–456 Cite as

Integrated Product Development at Nestlé

• Namy Espinoza-Orias 4 ,
• Karen Cooper 4 &
• Sofiane Lariani 4  
• Open Access
• First Online: 04 July 2018

43k Accesses

3 Citations

Nestlé’s purpose is to enhance the quality of life and contribute to a healthier future. In practice, it is translated into product development through a life cycle, multi-criteria, and integrated approach engaging internal and external stakeholders. An overview of the company’s values is presented as well as its creating shared value business principles, followed by an explanation of the Sustainability by Design program and how it is embedded into product innovation and renovation. The integrated development of a breakfast solution for children who skip breakfast exemplifies this approach. Being proactive and understanding that what matters to consumers entails all aspects of the product—going beyond quality and including sustainability—enriches the product development process, informs decision-making timely, provides consumers with a product they prefer, delivers competitive advantage, and supports the fulfilment of Nestlé’s public commitments.

You have full access to this open access chapter,  Download chapter PDF

1 Introduction

In 2016, Nestlé celebrated its 150th anniversary and is currently the largest food and beverage company worldwide. From the beginning, when Henri Nestlé invented the Farine Lactée to save the life of an infant, Nestlé’s purpose has been to enhance the quality of life and contribute to a healthier future. What drives our value creation, both for business and society, is a nutrition, health and wellness strategy. With more than 2000 brands, whose products are sold across seven product categories in 191 countries, understanding and anticipating consumer needs in an ever evolving and competitive environment is imperative for Nestlé’s long-term business success. This is precisely the starting point of our integrated product development. It follows a life cycle, multi-criteria process, with the engagement of internal and external stakeholders and the firm inclusion of Nestlé’s values, business principles and public commitments against which our company and products are held accountable.

The purpose of this paper is to explain how key elements bring in practice product innovation and renovation with a competitive advantage. Our values framework, business model, Sustainability by Design program and integrated product development approach are reviewed. A breakfast solution for schoolchildren who skip breakfast is presented as an example of consumer-centric product development.

2 Creating Shared Value, the Nestlé Way

Guided by values rooted in respect, Nestlé works alongside partners and stakeholders to create shared value (CSV) across all the activities of the company, which contribute to society while ensuring the long-term success of our business.

Three interconnected focus areas are identified wherein our purpose is realized:

Individuals and families: to whom Nestlé offers products and services that enable them to lead healthier and happier lives.

Our communities: helping those we live and work with in developing into thriving and resilient communities, enhancing rural livelihoods, and respecting and promoting human rights.

Our planet: stewarding resources for the future, caring for water, acting on climate change and shaping sustainable consumption.

Our CSV priorities and efforts are supported by 42 specific, public commitments with clear short-term timelines (2020) as well as three overarching medium term (2030) ambitions for our focus areas. In particular, Nestlé aims to help 50 million children lead healthier and happier lives, help improve the livelihoods of 30 million in communities directly connected to our business activities and strive for zero environmental impact in our business operations [ 1 ].

The recently updated and reframed commitments as well as newly introduced ones [ 1 ] go further and deeper than the first set of them launched back in 2012. The commitments were defined taking into account stakeholder recommendations and issues material to our consumers, stakeholders and the company. The materiality assessment is carried out every two years in collaboration with SustainAbility—an independent consultancy specialized in corporate sustainability—using a formal process entailing extensive consultations of stakeholders, investors and key opinion leaders. Issues of concern in the environmental, social and governance areas are identified and assessed in order to determine their business impact in terms of risks and opportunities along with the level of interest stated by stakeholders. The commitments were also aligned in scope and timeline with the Sustainable Development Goals (SDGs) [ 2 ].

In particular, those SDGs where Nestlé has specific responsibilities as a member of the private sector and can have the most positive and meaningful impact are emphasized. This is achieved by mapping our material issues to the SDGs; as a result, it is possible to find where our activities contribute, directly or indirectly, to the realization of the SDGs.

3 Sustainability by Design

In order to embed sustainability into our products, the Sustainability by Design program led by the Nestlé Research organization assesses the sustainability aspects at the earliest phase of the product development cycle. The aim is to optimize the impacts across the entire value chain through an iterative approach that spans the product development process. The various elements taken into account are schematised in Fig.  1 .

Elements considered in the sustainability assessment of products at Nestlé

From the early stages of a product development, projects are systematically evaluated with the following steps:

Identification—as early as possible—of the opportunities or hotspots, either environmental or social. A tool has been developed that guides projects through the process of discussing its potential impact on individuals and families, our communities and the planet. Project managers collaborate with sustainability champions to identify which societal commitments their project may affect, positively or negatively. This is revisited at key moments in the project, i.e. when passing a stage gate or a major change occurs.

Comparison to the Nestlé materiality matrix (Fig.  2 ), which summarizes the issues of concern to the company and its stakeholders. As the 42 commitments are not exhaustive to all potential issues, this enables project managers to understand if their project may assist in other areas of concern.

2016 Nestlé materiality matrix (Nestlé, 2017)

An action plan is developed to either mitigate or leverage the potential impacts and is then recorded as part of the project process. The actions can consist of carrying out further in-depth assessments as the project progresses and more information becomes available.

The tool covers every step in the value chain from ingredients, processing in our factories, packaging, consumer use right through to end of life. It allows a deep dive into specific aspects; for example, into ingredients and responsible sourcing, linking into the Procurement side of the company.

At this point, a project is also assigned a specific rating for potential environmental sustainability impact, which is a key KPI tracked at a strategic level across the project portfolio. This tracking allows the calculation of time spent on projects of different ratings, an important indicator as to whether the portfolio will deliver against our environmental commitments. This rating can be reviewed or ratified at various points in the project process.

The assessment itself ends at this point, having taken approximately an hour but delivering key information on how the project will deliver against sustainability and an action plan for improvement.

Following up on the agreed actions usually involves the use of EcodEX, a simplified environmental life cycle assessment tool developed with an outside IT company, Selerant [ 3 ]. This tool allows the comparison of multiple scenarios, for instance a current product in the market versus an innovation. Early use allows detailed quantitative information on potential environmental issues and benefits to be available for decision making at a point where there is more design freedom and less cost to make changes.

Future potential work to develop this tool may include a stronger social focus and Nestlé is evaluating the latest methodologies in this area.

4 Integrated Product Development

Consumer centric product development, renovation or innovation must also take into account the different elements influencing the decision to buy food and beverage products. These are taste, price, healthiness, convenience and sustainability [ 4 ].

The incremental approaches optimizing one element at the time in a complex environment where Nestlé has to come up with heathy, sustainable products that the consumer wants and can afford, have quickly shown their limitations.

Therefore, Nestlé Research put in place a holistic approach, called PrIME, optimizing at the same time consumer healthiness, preference, sustainability and affordability. Integrating these four elements into product development through deep understanding of consumer needs and preferences has helped identifying optimal recipes by maximizing these different elements simultaneously.

Nestlé is applying the PrIME approach to product design and packaging to optimize the whole product experience by:

Mastering healthiness and sensorial product features. For example, delivering product sweetness with less sugar through optimal product design.

Improving the packaging functionality to ensure:

Inclusions of all individuals (for instance the elderly), and

Frustration free packaging experience.

Nestlé Research has developed this consumer centric product development approach in all key global brands for the past years and we are now deploying it in the main markets to support our local brands.

This consumer-centric approach is built around a process that uses a collection of standardized methodologies and tools to connect people understanding and product knowledge. The management of our knowledge and data is the foundation of this process and the way to accelerate it, iteration after iteration. Therefore, several activities are in place to optimize the management and sharing of consumer and product knowledge and data. PrIME is using data from different sources and big data techniques to ensure we constantly satisfy the evolution of needs of individuals and families.

PrIME consists of the following steps:

Identification of consumer value drivers: what is important for the individuals and families? How do they like consuming their products? What are their needs? What are their dissatisfactions? This first step is important to dive into the heart of the consumer preferences but not sufficient to decode individuals and family’s needs.

Understanding people needs and behaviours is at the heart of this approach. We use state of the art consumer research to translate multi-dimensional needs into objective product features and attributes.

Consumer centric product and technological mastership is ultimately the way to:

a. Fast track product development. b. Identify our product knowledge gaps and develop innovative, differentiating and sustainable technologies to better satisfy the consumer on the elements cited above: healthiness, preference, sustainability and affordability. c. Control our manufacturing settings and provide day after day high and sustainable product quality to individuals and families.

The PrIME approach has shown its success developing efficiently and effectively the products the consumer wants first time right and contributes to push us to  constantly innovate in technologies relevant for consumers, communities and the planet.

4.2 Nutritional Considerations for Product Development at Nestlé

Nestlé Research developed in 2004 the Nestlé Nutritional Profiling System (NNPS) that guides the nutritional dimension of formulation and reformulation of Nestlé products nutritional product development [ 5 ]. The NNPS translates nutritional recommendations from the World Health Organization and other international and national organizations—taking also technical feasibility into account—into tangible product targets, e.g. the amounts of nutrients to limit and nutrients to encourage in a product. If all targets defined by the NNPS are met, then the product achieves the Nutritional Foundation (NF). The nutritional assessment is facilitated through a tool, globally rolled out in Nestlé and used by more than 1000 product developers and nutritionists. This assessment is a fundamental step within the development process and guides further improvements in the products.

5 Case Study: Nestlé Nido GoldenStart©

Although breakfast is considered the most important meal of the day, it is common that children skip breakfast frequently, thus missing the opportunity to consume a meal rich in nutrients recommended for a wholesome diet. Existing studies and reviews on breakfast consumption habits in different regions and countries [ 6 , 7 , 8 ] report that between 10 and 30% of schoolchildren skip breakfast.

The reasons leading to skipping breakfast are varied, and include socio-demographic factors, limited nutritional knowledge, lack of time and planning for breakfast (preparation and/or consumption), absence of hunger in the morning, limited or no availability of breakfast foods that are affordable and convenient, as well as concerns about body weight [ 9 , 10 , 11 ].

A review was made to summarize recommendations for a complete, healthful breakfast in order to offer guidance on its ideal composition and energy intake [ 12 , 13 ]. A breakfast should provide between 20 and 25% of the overall daily energy intake, a range that already takes into account the number of eating occasions in a day (breakfast, lunch, dinner and snacks). A complete breakfast meal should consist of solid and liquid foods, with the purpose of maximizing nutrient intake and reducing or closing nutrient gaps. Foods containing protein, whole grains, fruits and vegetables are specifically recommended.

Following the holistic approaches described earlier (Sustainability by Design, PrIME and nutritional assessment through the NNPS), Nestlé developed a breakfast solution targeting the segment of schoolchildren aged 4–8 who are breakfast skippers. This product, marketed under the brand Nido GoldenStart©, provides the right combination of essential nutrients required for breakfast and 12% of the daily energy intake for this age group. Its ingredients are milk, cereals and fruits, delivered in a convenient ready to drink format (beverage carton, 200 ml). A first generation of the product (powder beverage) was launched in Central America in 2015; a second generation ready to drink version was launched in Ecuador in September 2017.

The various steps followed in the integrated product development process can be recapped as follows:

Consolidation of consumer data: The drivers of preference, expressed in terms of sensory attributes (taste, texture, aroma, colour, etc.) were identified by mining internal consumer insight data.

Definition of the right nutritional targets through the NNPS and a project to define specific nutritional targets for complete breakfasts and “breakfast-on-the-go”.

Product and process mastership: Product experts at Research and Development units as well as factories represented the key unit operations required to screen the potential ingredients, design the recipe, define the process parameters and finally manufacture the product.

A large number of possible recipes was reduced to an optimal number. These recipes were produced for consumer trials considering factors such as consumer and sensory data, recipe cost and technical constraints.

Preference mapping: The recipes most liked by parents and children were selected and the reasons for liking or disliking them were explored. In parallel, a monadic sensory profiling was performed with an expert panel to understand the consumers’ feedback. A satiation test was also conducted to assess the effect of the product texture on satiation and thus validate the portion size.

Validation test: The superiority of the final recipe was validated using a number of internal methods, among which the Nutritional Foundation (NF) and 60/40+ taste preference criteria can be highlighted. 60/40 is a Nestlé method whereby consumers are asked to state their preference in a blind test between an own product and a competitor or benchmark. A Nestlé product passes the test when more than 60% of the consumers would prefer it to the competitor product or benchmark. The “+” equals achieving the Nutritional Foundation, meaning all nutritional targets defined by the NNPS are met.

Environmental sustainability evaluation: The eco-design of the product was carried out using the EcodEX tool. On a basis of 100 kilocalories delivered, Nido GoldenStart© showed improved environmental performance on all five environmental indicators assessed (climate change, freshwater consumption scarcity, abiotic depletion, ecosystems quality and land use impact on biodiversity) when compared to a reference product.

Moreover, the integrated development of Nido GoldenStart© satisfies a clear consumer need while contributing to the achievement of Nestlé commitments on:

Inspiring people to lead healthier lives: Empower parents to foster healthy behaviours in children (not skipping breakfast).

Offering tastier and healthier choices: Launching more nutritious foods and beverages especially for children. Increase the fibre and grains content in our foods and beverages.

Safeguarding the environment: Assess and optimize the environmental impact of our products.

6 Conclusions

This holistic and comprehensive approach, as applied by Nestlé, delivers competitive advantage, leads to the fulfilment of public commitments at company level and drives our contribution as member of the food industry to the attainment of the Sustainable Development Goals. Informed decision-making takes place at the various steps of project execution, risks and opportunities are identified, with early warning brought up in a timely manner.

However, given the breadth of technical areas concerned and what is at stake, the interpretation of data and insights resulting from this way of working can be complex and raise some challenges. The deployment of support tools can only be justified as long as they are used properly and extensively. Deciding which business function will take up the identified actions for improvement, either Research and Development, Operations, Markets or a combination requires alignment of objectives and priorities as well as clear allocation of resources. For a company as large as Nestlé, it is fundamental to progress from starting the conversation and raising awareness on integrated product development, to consistently accomplishing it.

Being proactive and understanding that what matters to consumers entails all aspects of the product—going beyond quality and including sustainability—enriches the product development process and provides consumers with a product they prefer.

https://www.nestle.com/asset-library/documents/library/documents/corporate_social_responsibility/nestle-csv-full-report-2017-en.pdf . (Accessed 04.04.2018).  

http://www.un.org/ga/search/view_doc.asp?symbol=A/RES/70/1&Lang=E . (Accessed 30.05.2017).

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http://www.foodinsight.org/sites/default/files/2016-Food-and-Health-Survey-Report_FINAL1.pdf . (Accessed 30.05.2017).

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Espinoza-Orias, N., Cooper, K., Lariani, S. (2018). Integrated Product Development at Nestlé. In: Benetto, E., Gericke, K., Guiton, M. (eds) Designing Sustainable Technologies, Products and Policies. Springer, Cham. https://doi.org/10.1007/978-3-319-66981-6_50

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Nestle's Creating Shared Value Strategy

By: Michael E. Porter, Mark R. Kramer, Kerry Herman, Sarah McAra

This case considers Nestlé's creating shared value (CSV) strategy, which focused on the three categories of nutrition, water, and rural development. In the packaged food and beverage industry,…

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This case considers Nestlé's creating shared value (CSV) strategy, which focused on the three categories of nutrition, water, and rural development. In the packaged food and beverage industry, pressure had mounted since the 1990s to improve supply chain sustainability and provide healthier, more natural foods, leading to consolidation and causing sales to decline in the 2010s. With 150 years' experience in the industry, Nestlé had transformed into a nutrition, health, and wellness company and made its CSV strategy explicit in the early 21st century. By 2014, Nestlé CEO Paul Bulcke considered how best to fully embed the company's CSV strategy and to communicate it to shareholders and external stakeholders.

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Provide participants with an opportunity to discuss the approaches to implementing and communicating shared value.

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Nestle Marketing Strategy: A Case Study

Nestle is one of the world’s largest food and beverage companies with a presence in 191 countries . The company has a diverse product portfolio that ranges from pet food to baby food, and from coffee to confectionery. Nestle’s marketing strategy has played a crucial role in the company’s success over the years . In this article, we will take a closer look at Nestle’s marketing strategy and how it has contributed to the company’s growth.

Table of Contents

Introduction

The introduction will give an overview of Nestle and its products.

Nestle is a Swiss multinational food and beverage company that was founded in 1866 by Henri Nestle. Today, Nestle has a presence in 191 countries and employs over 300,000 people . Nestle’s product portfolio includes pet food, baby food, coffee, confectionery, and many other products.

Market Segmentation

Market segmentation is a crucial element of Nestle’s marketing strategy. The company targets different segments of the market with different products.

Geographic Segmentation

Nestle operates in 191 countries, and the company tailors its products to meet the needs and preferences of customers in each country.

Demographic Segmentation

Nestle’s products are designed to cater to different age groups and genders. For example, the company’s baby food products are designed for infants, while its confectionery products are designed for adults.

Psychographic Segmentation

Nestle’s marketing strategy also targets customers based on their lifestyle and personality. For example, the company’s premium coffee products are targeted at customers who value quality and are willing to pay a premium price for it.

Product Mix

Nestle’s product mix is diverse and includes different types of products, including food, beverage, and pet care products. The company has a large number of brands in its product portfolio.

Product Line Extension

Nestle uses product line extensions to expand its product portfolio. For example, the company has launched different flavors of its KitKat chocolate bar in different countries.

Product Innovation

Nestle invests heavily in product innovation to meet the changing needs and preferences of customers. For example, the company has launched plant-based meat products under its Garden Gourmet brand.

Pricing Strategy

Nestle’s pricing strategy is designed to cater to different segments of the market. The company uses different pricing strategies for different products.

Value-Based Pricing

Nestle uses value-based pricing for its premium products, such as its Nespresso coffee machines. The company sets a premium price for these products to reflect their quality and value.

Penetration Pricing

Nestle uses penetration pricing for some of its products, such as its instant coffee products. The company sets a low price for these products to penetrate the market and gain market share.

Promotion Strategy

Nestle’s promotion strategy is designed to create brand awareness and increase sales.

Advertising

Nestle uses different types of advertising, including TV, print, and online advertising, to reach its target audience .

Sales Promotion

Nestle uses sales promotions, such as discounts and free samples, to encourage customers to try its products.

Public Relations

Nestle uses public relations to enhance its corporate image and build brand trust. For example, the company has launched initiatives to support sustainable agriculture.

Distribution Strategy

Nestle’s distribution strategy is designed to ensure that its products are available to customers in different parts of the world.

Direct Distribution

Nestle uses direct distribution for some of its products, such as its Nespresso coffee capsules. The company sells these products directly to customers through its online store.

Indirect Distribution

Nestle also uses indirect distribution channels, such as supermarkets and convenience. stores, to reach a wider customer base. The company partners with distributors and retailers to ensure that its products are available in different parts of the world.

Digital Marketing

In recent years, Nestle has increased its focus on digital marketing to reach its target audience.

Social Media Marketing

Nestle uses social media platforms, such as Facebook, Twitter, and Instagram, to promote its products and engage with customers.

Content Marketing

Nestle uses content marketing to provide customers with information about its products and educate them about their benefits.

Nestle’s marketing strategy has played a crucial role in the company’s success over the years. The company’s market segmentation, product mix, pricing strategy, promotion strategy, and distribution strategy are all designed to cater to the needs and preferences of its target audience. Additionally, Nestle’s focus on digital marketing has helped the company reach a wider audience and engage with customers in new ways.

What is Nestle’s marketing strategy?

Nestle’s marketing strategy is designed to cater to the needs and preferences of its target audience through market segmentation, product mix, pricing strategy, promotion strategy, and distribution strategy.

How does Nestle use market segmentation in its marketing strategy?

Nestle targets different segments of the market based on geographic, demographic, and psychographic factors.

What is Nestle’s product mix?

Nestle’s product mix includes food, beverage, and pet care products, among others.

What pricing strategies does Nestle use?

Nestle uses value-based pricing for premium products and penetration pricing for some of its other products.

How does Nestle use digital marketing in its marketing strategy?

Nestle uses social media marketing and content marketing to reach its target audience and engage with customers in new ways.

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Nestle PESTEL Analysis

Before we dive deep into the PESTEL analysis, let’s get the business overview of Nestle. Nestlé S.A. is a Swiss multinational food and beverage company considered one of the largest in the world. Here is a brief overview of their business:

Foundation and History:  Nestlé was founded in 1866 by Henri Nestlé in Vevey, Switzerland. Initially, the company specialized in selling infant cereal, but over the years, it expanded its product portfolio through a series of acquisitions and brand developments.

Product Portfolio:  Nestlé has a diverse product range covering various categories such as dairy products, beverages, processed food, confectionery, infant nutrition, health science, and pet care. The company owns several well-known brands, including Nescafé, Kit Kat, Smarties, Nespresso, Stouffer’s, Gerber, Purina, and Maggi, among others.

Operations:  Nestlé operates in nearly every country globally, with over 400 factories across different continents. This vast presence enables the company to cater to various consumer tastes and preferences.

Sustainability and Corporate Social Responsibility:  Nestlé has committed to several sustainability initiatives, such as aiming for zero environmental impact in their operations by 2030 and using more recyclable packaging. The company also invests in various corporate social responsibility initiatives in nutrition, water, rural development, and responsible sourcing.

Future Direction:  The company continuously invests in research and development to create new products and improve existing ones. As consumer preferences shift towards healthier and more sustainable products, Nestlé is focusing on improving the nutritional value of its products and reducing its environmental footprint.

Financial Performance : In 2022, Nestle reported sales increased by 8.4% to CHF 94.4 billion, and the underlying trading operating profit (UTOP) margin was 17.1%

Good food, Good growth: Nestle’s way of doing business!

Here is the PESTEL analysis of Nestle

A PESTEL analysis is a strategic management framework used to examine the external macro-environmental factors that can impact an organization or industry. The acronym PESTEL stands for:

• Political factors: Relate to government policies, regulations, political stability, and other political forces that may impact the business environment. 
• Economic factors: Deal with economic conditions and trends affecting an organization’s operations, profitability, and growth. 
• Sociocultural factors: Relate to social and cultural aspects that may influence consumer preferences, lifestyles, demographics, and market trends.
• Technological factors: Deal with developing and applying new technologies, innovations, and trends that can impact an industry or organization. 
• Environmental factors: Relate to ecological and environmental concerns that may affect an organization’s operations and decision-making.
• Legal factors: Refer to the laws and regulations that govern businesses and industries. 

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In this article, we will do a PESTEL Analysis of Nestle.

PESTEL Analysis Framework: Explained with Examples

• Regulatory Compliance:  Given its global presence, Nestlé must comply with various food safety, labeling, and product regulations across different countries. Any changes in these regulations can significantly impact Nestlé’s operations, costs, and strategies.
• Political Stability:  Political stability in a country or region can significantly impact Nestlé’s operations. Political instability or conflicts can disrupt supply chains, production, or market access. Conversely, political stability can offer a conducive environment for business operations and growth.
• Trade Policies:  Tariffs, import/export restrictions, and other trade policies can impact Nestlé’s business. For instance, changes in international trade agreements could impact the costs of raw materials or finished products, affecting the company’s profit margins.
• Tax Policies:  Changes in corporate tax policies in the countries where Nestlé operates can impact its financial performance. For example, increased corporate tax rates could reduce the company’s net profits.
• Government Initiatives:  Government initiatives can either positively or negatively affect Nestlé. For instance, government programs promoting healthy eating could impact the demand for some of Nestlé’s products. Conversely, subsidies or incentives in agriculture could lower costs for some raw materials.
• Geopolitical Issues:  These could also have an impact on Nestlé’s operations. This includes Brexit, international relations, and other geopolitical shifts that could affect the company’s access to certain markets or its supply chain.

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• Global and Regional Economies:  The overall health of the global economy and specific regional economies can significantly impact Nestlé. Economic downturns or recessions may reduce consumer spending, affecting demand for Nestlé’s products. Conversely, economic growth can increase demand.
• Exchange Rates:  As a multinational company operating in numerous countries, Nestlé deals in multiple currencies. Fluctuations in exchange rates can affect the company’s revenues, costs, and profits. For example, a strong Swiss Franc (Nestlé’s reporting currency) can reduce the value of sales and profits made in other currencies.
• Inflation Rates:  Changes in inflation rates can affect both the cost of raw materials and consumers’ purchasing power. High inflation can increase costs and reduce demand if consumers cannot afford products.
• Interest Rates:  Interest rates can impact Nestlé’s cost of capital. For instance, high-interest rates can increase the cost of borrowing for capital investments, while low-interest rates can make borrowing cheaper.
• Unemployment Rates:  High unemployment rates can reduce consumer spending power, which may affect the demand for Nestlé’s products. Conversely, low unemployment rates might increase consumer spending, potentially boosting sales.
• Consumer Confidence:  This measures how optimistic consumers are about their financial future. When consumer confidence is high, consumers are more likely to spend on non-essential goods, potentially benefiting companies like Nestlé.
• Nestle’s Marketing Strategy of Expertise in Nutrition
• Nestle SWOT Analysis

Sociocultural

• Changing Consumer Preferences:  Consumer tastes and preferences are constantly changing. Trends such as health consciousness, organic products, and plant-based diets could impact the demand for various Nestlé products. Nestlé must anticipate and adapt to these changes to stay relevant.
• Demographics and Lifestyle:  Age distribution, income levels, and lifestyle changes can influence the demand for Nestlé’s products. For example, an aging population might boost the demand for health and wellness products, while rising income levels could increase the demand for premium products.
• Cultural Sensitivities:  As a global company, Nestlé operates in diverse cultures. Understanding cultural sensitivities, local customs, and tastes is crucial for product development, marketing, and overall business strategy.
• Social Awareness and Ethics:  Consumers are increasingly concerned about ethical issues such as sustainability, fair trade, and animal welfare. Nestlé’s practices regarding these issues can affect its brand image and consumer loyalty.
• Consumer Health Consciousness:  There’s a growing trend of health consciousness among consumers globally. People are becoming more aware of nutritional value and are often willing to pay premium prices for healthier alternatives. This trend influences the demand for Nestlé’s healthier and ‘better-for-you’ product ranges.
• Attitudes towards Foreign Companies:  In some markets, consumers may prefer local brands or negatively perceive foreign companies. This can affect Nestlé’s market share and performance in these regions.

Technological

• Production Technology:  Technological advances can improve efficiency, cost savings, and quality control in Nestlé’s manufacturing processes. This includes things like automation, AI, and other advanced manufacturing technologies.
• Supply Chain and Logistics Technology:  Technology can significantly enhance supply chain and logistics management, leading to cost savings, better inventory management, and improved efficiency. Technologies such as IoT, blockchain, AI, and machine learning can significantly improve these areas.
• Digital Marketing:  The rise of digital marketing and social media has transformed how companies interact with customers. Nestlé can leverage these platforms for advertising, customer engagement, brand awareness, and market research.
• E-commerce:  The growth of online retail has created new sales channels for Nestlé’s products. This could affect Nestlé’s sales strategies and distribution channels.
• Research and Development:  Technological advancements can support Nestlé’s research and development activities, leading to the development of new products or improvements to existing ones. This could be crucial for staying competitive and meeting changing consumer needs.
• Data Analysis and Forecasting:  Technology has improved companies’ ability to collect, analyze, and use data. This can help Nestlé better understand market trends, consumer behavior, and operational performance, aiding in strategic decision-making.
• Sustainability Technology:  Technological innovations can also contribute to sustainability efforts, an area of increasing importance for businesses. This could include technologies for reducing energy usage, waste, and emissions in production processes or creating more sustainable packaging.

Environmental

• Climate Change:  Climate changes can affect the availability and cost of key raw materials for Nestlé, such as cocoa, coffee beans, and milk. This could impact the company’s supply chain and product costs.
• Sustainability:  There’s a growing expectation from consumers, governments, and investors for businesses to operate sustainably. Nestlé’s strategies around waste management, energy use, water conservation, and sustainable sourcing can impact its brand reputation and compliance with regulations.
• Packaging:  Nestlé, like other food and beverage companies, uses a lot of packaging for its products. The environmental impact of packaging is a significant concern, leading to regulations and consumer demand for more sustainable packaging solutions.
• Regulations:  Environmental regulations can affect various aspects of Nestlé’s operations. This could include regulations around emissions, waste disposal, water use, and the use of genetically modified organisms (GMOs) in products.
• Biodiversity:  Companies are increasingly expected to consider their impact on biodiversity. For Nestlé, this could relate to the sourcing of raw materials and the impact of its operations on local ecosystems.
• Natural Disasters:  Natural disasters, which may be exacerbated by climate change, can disrupt Nestlé’s operations, including production facilities and supply chains.
• Food Safety Regulations:  As a food and beverage company, Nestlé must comply with stringent food safety regulations in all its countries. These regulations cover product quality, ingredients, labeling, and packaging. Non-compliance can lead to fines, recalls, or damage to the company’s reputation.
• Employment Laws:  Employment laws vary significantly across countries. These laws cover wages, working conditions, diversity, and employee rights. Nestlé must adhere to these laws to avoid legal issues and maintain a positive corporate image.
• Environmental Laws:  Nestlé must comply with environmental laws related to waste disposal, emissions, energy use, etc. These laws can influence Nestlé’s production processes, costs, and sustainability initiatives.
• Trade Regulations:  International trade regulations affect how Nestlé imports and exports goods across borders. Changes in tariffs, customs regulations, and trade agreements can impact Nestlé’s supply chain and profitability.
• Advertising Laws:  There are laws and regulations governing how products can be marketed and advertised, which Nestlé must follow. Non-compliance could lead to legal consequences and harm the company’s reputation.
• Intellectual Property Laws:  Nestlé, like any company, must manage its intellectual property rights, such as trademarks, patents, and copyrights. It must also ensure it does not infringe on the intellectual property rights of others.

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Home » Management Case Studies » Case Study: Nestle’s Growth Strategy

Case Study: Nestle’s Growth Strategy

Nestle is one of the oldest of all multinational businesses. The company was founded in Switzerland in 1866 by Heinrich Nestle, who established Nestle to distribute “milk food,” a type of infant food he had invented that was made from powdered milk, baked food, and sugar. From its very early days, the company looked to other countries for growth opportunities, establishing its first foreign offices in London in 1868. In 1905, the company merged with the Anglo-Swiss Condensed Milk, thereby broadening the company’s product line to include both condensed milk and infant formulas. Forced by Switzer ­land’s small size to look outside’ its borders for growth opportunities, Nestle established condensed milk and infant food processing plants in the United States and Britain in the late 19th century and in Australia, South America, Africa, and Asia in the first three decades of the 20th century. In 1929, Nestle moved into the chocolate business when it acquired a Swiss chocolate maker. This was fol ­lowed in 1938 by the development of Nestle’s most rev ­olutionary product, Nescafe, the world’s first soluble coffee drink. After World War 11, Nestle continued to expand into other areas of the food business, primarily through a series of acquisitions that included Maggi (1947), Cross & Blackwell (1960), Findus (1962), Libby’s (1970), Stouffer’s (1973), Carnation (1985), Rowntree (1988), and Perrier (1992). By the late 1990s, Nestle had 500 factories in 76 countries and sold its products in a staggering 193 nations-almost every country in the world. In 1998, the company generated sales of close to SWF 72 billion ($51 billion), only 1 percent of which occurred in its home country. Similarly, only 3 percent of its- 210,000 employees were located in Switzerland. Nestle was the world’s biggest maker of infant formula, powdered milk, chocolates, instant coffee, soups, and mineral waters. It was number two in ice cream, breakfast cereals, and pet food. Roughly 38 percent of its food sales were made in Europe, 32 percent in the Americas, and 20 percent in Africa and Asia.

Management Structure

Nestle is a decentralized organization .   Responsibility for operating decisions is pushed down to local units, which typically enjoy a high degree of autonomy with regard to decisions involving pricing, distribution, marketing, human resources, and so on.   At the same time, the company is organized into seven worldwide strategic business units (SBUs) that have responsibility for high-level strategic decisions and business development.   For example, a strategic business unit focuses on coffee and beverages.   Another one focuses on confectionery and ice cream.   These SBUs engage in overall strategy development, including acquisitions and market entry strategy.   In recent years, two-thirds of Nestle’s growth has come from acquisitions, so this is a critical function.   Running in parallel to this structure is a regional organization that divides the world into five major geographical zones, such as Europe, North America and Asia.   The regional organizations assist in the overall strategy development process and are responsible for developing regional strategies (an example would be Nestle’s strategy in the Middle East, which was discussed earlier).   Neither the SBU nor regional managers, however, get involved in local operating or strategic decisions on anything other than an exceptional basis.

Although Nestle makes intensive use of local managers to knit its diverse worldwide operations together, the company relies on its “expatriate army.”   This consists of about 700 managers who spend the bulk of their careers on foreign assignments , moving from one country to the next.   Selected primarily on the basis of their ability, drive and willingness to live a quasi-nomadic lifestyle, these individuals often work in half-a-dozen nations during their careers.   Nestle also uses management development programs as a strategic tool for creating an esprit de corps among managers.   At Rive-Reine, the company’s international training center in Switzerland, the company brings together, managers from around the world, at different stages in their careers, for specially targetted development programs of two to three weeks’ duration.   The objective of these programs is to give the managers a better understanding of Nestle’s culture and strategy, and to give them access to the company’s top management.

The research and development operation has a special place within Nestle, which is not surprising for a company that was established to commercialize innovative food stuffs.   The R&D function comprises 18 different groups that operate in 11 countries throughout the world.   Nestle spends approximately 1 percent of its annual sales revenue on R&D and has 3,100 employees dedicated to the function.   Around 70 percent of the R&D budget is spent on development initiatives.   These initiatives focus on developing products and processes that fulfill market needs, as identified by the SBUs, in concert with regional and local managers.   For example, Nestle instant noodle products were originally developed by the R&D group in response to the perceived needs of local operating companies through the Asian region. The company also has longer-term development projects that focus on developing new technological platforms, such as non-animal protein sources or agricultural biotechnology products.

A Growth Strategy for the 21 st Century

Despite its undisputed success, Nestle realized by the early 1990s, that it faced significant challenges in maintaining its growth rate. The large Western European and North American markets were mature.   In several countries, population growth had stagnated and in some, there had been a small decline in food consumption. The retail environment in many Western nations had become increasingly challenging and the balance of power was shifting away from the large-scale manufacturers of branded foods and beverages, and toward nationwide supermarket and discount chains. Increasingly, retailers found themselves in the unfamiliar position of playing off against each other – manufacturers of branded foods, thus bargaining down prices. Particularly in Europe, this trend was enhanced by the successful introduction of private-label brands by several of Europe’s leading supermarket chains.   The results included increased price competition in several key segments of the food and beverage market, such as cereals, coffee and soft drinks.

At Nestle, one response has been to look toward emerging markets in Eastern Europe, Asia and Latin America for growth possibilities.   The logic is simple and obvious – a combination of economic and population growth, when coupled with the widespread adoption of market-oriented economic policies by the governments of many developing nations, makes for attractive business opportunities.   Many of these countries are still relatively poor, but their economies are growing rapidly.   For example, if current economic growth forecasts occur, by 2010, there will be 700 million people in China and India that have income levels approaching those of Spain in the mid-1990s.   As income levels rise, it is increasingly likely that consumers in these nations will start to substitute branded food products for basic foodstuffs, creating a large market opportunity for companies such as Nestle.

In general,  Nestle’s growth strategy had been to enter emerging markets early – before competitors – and build a substantial position by selling basic food items that appeal to the local population base, such as infant formula, condensed milk, noodles and tofu. By narrowing its initial market focus to just a handful of strategic brands, Nestle claims it can simplify life, reduce risk, and concentrate its marketing resources and managerial effort on a limited number of key niches.   The goal is to build a commanding market position in each of these niches.   By pursuing such a strategy, Nestle has taken as much as 85 percent of the market for instant coffee in Mexico, 66 percent of the market for powdered milk in the Philippines, and 70 percent of the markets for soups in Chile.   As income levels rise, the company progressively moves out from these niches, introducing more upscale items, such as mineral water, chocolate, cookies, and prepared foodstuffs.

Although the company is known worldwide for several key brands, such as Nescafe, it uses local brands in many markets.   The company owns 8,500 brands, but only 750 of them are registered in more than one country, and only 80 are registered in more than 10 countries.   While the company will use the same “global brands” in multiple developed markets, in the developing world it focuses on trying to optimize ingredients and processing technology to local conditions and then using a brand name that resonates locally. Customization rather than globalization is the key to the Nestle’s growth strategy  in emerging markets.

Executing the Strategy

Successful execution of the strategy for developing markets requires a degree of flexibility, an ability to adapt in often unforeseen ways to local conditions, and a long-term perspective that puts building a sustainable business before short-term profitability.   In Nigeria, for example, a crumbling road system, aging trucks, and the danger of violence forced the company to re-think its traditional distribution methods.   Instead of operating a central warehouse, as is its preference in most nations, the country.   For safety reasons, trucks carrying Nestle goods are allowed to travel only during the day and frequently under-armed guard.   Marketing also poses challenges in Nigeria.   With little opportunity for typical Western-style advertising on television of billboards, the company hired local singers to go to towns and villages offering a mix of entertainment and product demonstrations.

China provides another interesting example of local adaptation and long-term focus.   After 13 years of talks, Nestle was formally invited into China in 1987, by the Government of Heilongjiang province.   Nestle opened a plant to produce powdered milk and infant formula there in 1990, but quickly realized that the local rail and road infrastructure was inadequate and inhibited the collection of milk and delivery of finished products.   Rather than make do with the local infrastructure, Nestle embarked on an ambitious plan to establish its own distribution network, known as milk roads, between 27 villages in the region and factory collection points, called chilling centres.   Farmers brought their milk – often on bicycles or carts – to the centres where it was weighed and analysed.   Unlike the government, Nestle paid the farmers promptly.   Suddenly the farmers had an incentive to produce milk and many bought a second cow, increasing the cow population in the district by 3,000 to 9,000 in 18 months.   Area managers then organized a delivery system that used dedicated vans to deliver the milk to Nestle’s factory.

Although at first glance this might seem to be a very costly solution, Nestle calculated that the long-term benefits would be substantial.   Nestle’s strategy is similar to that undertaken by many European and American companies during the first waves of industrialization in those countries.   Companies often had to invest in infrastructure that we now take for granted to get production off the ground.   Once the infrastructure was in place, in China, Nestle’s production took off.   In 1990, 316 tons of powdered milk and infant formula were produced.   By 1994, output exceeded 10,000 tons and the company decided to triple capacity.   Based on this experience, Nestle decided to build another two powdered milk factories in China and was aiming to generate sales of $700 million by 2000.

Nestle is pursuing a similar long-term bet in the Middle East, an area in which most multinational food companies have little presence.   Collectively, the Middle East accounts for only about 2 percent of Nestle’s worldwide sales and the individual markets are very small.   However, Nestle’s long-term strategy is based on the assumption that regional conflicts will subside and intra-regional trade will expand as trade barriers between countries in the region come down.   Once that happens, Nestle’s factories in the Middle East should be able to sell throughout the region, thereby realizing scale economies.   In anticipation of this development, Nestle has established a network of factories in five countries, in the hope that each will, someday, supply the entire region with different products.   The company, currently makes ice-cream in Dubai, soups and cereals in Saudi Arabia, yogurt and bouillon in Egypt, chocolate in Turkey, and ketchup and instant noodles in Syria.   For the present, Nestle can survive in these markets by using local materials and focusing on local demand.   The Syrian factory, for example, relies on products that use tomatoes, a major local agricultural product.   Syria also produces wheat, which is the main ingredient in instant noodles. Even if trade barriers don’t come down soon, Nestle has indicated it will remain committed to the region. By using local inputs and focussing on local consumer needs, it has earned a good rate of return in the region, even though the individual markets are small.

Despite its successes in places such as China and parts of the Middle East, not all of Nestle’s moves have worked out so well.   Like several other Western companies, Nestle has had its problems in Japan, where a failure to adapt its coffee brand to local conditions meant the loss of a significant market opportunity to another Western company, Coca Cola.   For years, Nestle’s instant coffee brand was the dominant coffee product in Japan.   In the 1960s, cold canned coffee (which can be purchased from soda vending machines) started to gain a following in Japan. Nestle dismissed the product as just a coffee-flavoured drink rather than the real thing and declined to enter the market.   Nestle’s local partner at the time, Kirin Beer, was so incensed at Nestle’s refusal to enter the canned coffee market that it broke off its relationship with the company. In contrast, Coca Cola entered the market with Georgia, a product developed specifically for this segment of the Japanese market.   By leveraging its existing distribution channel, Coca Cola captured a 40 percent share of the $4 billion a year, market for canned coffee in Japan.   Nestle, which failed to enter the market until the 1980s, has only a 4 percent share.

While Nestle has built businesses from the ground up, in many emerging markets, such as Nigeria and China, in others it will purchase local companies if suitable candidates can be found.   The company pursued such a strategy in Poland, which it entered in 1994, by purchasing Goplana, the country’s second largest chocolate manufacturer. With the collapse of communism and the opening of the Polish market, income levels in Poland have started to rise and so has chocolate consumption.   Once a scarce item, the market grew by 8 percent a year, throughout the 1990s.   To take advantage of this opportunity, Nestle has pursued a strategy of evolution, rather than revolution.   It has kept the top management of the company staffed with locals – as it does in most of its operations around the world – and carefully adjusted Goplana’s product line to better match local opportunities.   At the same time, it has pumped money into Goplana’s marketing, which has enabled the unit to gain share from several other chocolate makers in the country.   Still, competition in the market is intense.   Eight companies, including several foreign-owned enterprises, such as the market leader, Wedel, which is owned by PepsiCo , are vying for market share, and this has depressed prices and profit margins, despite the healthy volume growth.

Discussions:

• Does it make sense for Nestle to focus its growth efforts on emerging markets? Why?
• What is the company’s strategy with regard to business development in emerging markets? Does this strategy make sense? From an organizational perspective, what is required for this strategy to work effectively?
• Through your own research on NESTLE, identify appropriate performance indicators. Once you have gathered relevant data on these, undertake a performance analysis of the company over the last five years. What does the analysis tell you about the success or otherwise of the strategy adopted by the company?
• How would you describe Nestle’s strategic posture at the corporate level; is it pursuing a global strategy, a multidomestic strategy an international strategy or a transnational strategy?
• Does this overall strategic posture make sense given the markets and countries that Nestle participates in? Why?
• Is Nestle’s management structure and philosophy aligned with its overall strategic posture?

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• Case Study of Nestle

In this article you will learn about Nestle case study which includes different types of Pricing Strategies that Nestle has used.

In 2019, America accounted for 50% of Nestle’s global sales. In that year, it earned a total of around 92.6 billion Swiss francs.

→ How did Nestle manage to make that much money?

→ What was their price strategy?

Table of Contents

Nestle case study

Heinrich Nestle established Nestle in Switzerland in 1866. One of the first international corporations is Nestle. Nestle set out to seize development prospects in several nations right from the start. It joined with Anglo-Swiss condensed milk in 1905, expanding its product line to include condensed milk and infant formula. With operations in 189 nations, Nestle now has 447 plants.

Products offered by Nestle

Breakfast cereals, beverages, dairy, chocolates, nutritious foods and food services are all offered by Nestle.

Popular food items from Nestle that are available in India include Kit Kat, Maggi, Milkmaid, Polo, and Nescafe.

This renowned company has been using its knowledge of Health, Nutrition, and Wellness for more than 150 years to make its clients’ lives healthier and happier.

They do, however, believe that what works now might not tomorrow.

In order to uncover more ways to experiment with foods, nutrition, and beverages, they keep exploring and concentrating on pushing the boundaries.

Nestle unlocks the potential of food to raise everyone’s standard of living, not only now but for future generations.

The brand focuses on increasing consumer satisfaction and enjoyment, enabling better health, and making the greatest nutrition accessible to everyone.

In addition to this, the company explores novel approaches to safeguard and enhance natural resources.

Competitors of Nestle: A Case Study

Carnation, Kit Kat, Nestle-water, and Stouffers are just a few of the well-known consumer brands owned by Nestle.

The corporation is a major player in the global food and beverage market because thirty of its brands had earnings of more than $1 billion in 2010.

Nestle is one of the food and beverage industry’s most geographically diverse corporations, with about 42% of its sales occurring in North America. It puts it in a position that gives it an advantage over its competitors.

Leading economies including the United States and Europe have significant market shares where its brands are well-established.

Nestle faces significant competition from Danone and Unilever. Like Nestle, these two are industry titans in the food and beverage sector.

Due to its rapid sales in the food and beverage sector, particularly ice cream, frozen food, tea-based beverages, and cookery items, Unilever reported an increase in annual profits of almost 26% in 2010.

Danone, on the other hand, reported a 38 percent increase as a result of rising stock prices. Additionally, the surge in earnings was boosted by an increase in its yoghurt sales.

Nestle Handles, on the other hand, positioned itself in the market by implementing a new accounting technique that helped to drive down its cost of sales.

Discounts, allowances, and promotions for the company’s merchants could potentially be included in sales profits rather than the marketing line.

Even though Nestle’s sales were down for a year, their pricing strategy enabled them to compete with their counterparts, which helped them become a well-known manufacturer despite the intense competition.

Nestle, the most well-known food maker in the world, competes fiercely with Unilever.

With offices in 160 nations and about 1,49,000 employees, Unilever houses its food, home, and personal care divisions in London.

Unilever has a market share of about 8.6% in the Western European ready meals industry, which places it second, 0.3 points behind the renowned Nestle, as the corporation works hard to outperform Nestle in terms of the quality of their product.

Target Market of Nestle

The distinctive feature of Nestle is that it provides a broad selection of products that cater to audiences of all ages, from 2-year-olds to working adults.

Here is a list of Nestle’s target market and the products that are offered in each segment.

→Working Professionals

Everyone will be aware of how popular Nescafe is among working professionals, especially coffee enthusiasts.

Who doesn’t want to feel fresh?

According to Nestle, Nescafe is the only coffee that will keep professionals alert throughout the day.

Parents totally trust Nestle’s “Caregrow” product when it comes to children. Cereals are included in the product to keep young children healthy.

→General Audiences

For the broader public, Nestle offers a number of additional items like KitKat, Milkmaid, and Maggi.

Nestle has created products with something for everyone in mind. We’ll go into how Nestle has marketed itself and its goods online in the next section.

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Nestle’s strategies for Digital Marketing

You must be aware at this point that Nestle has the largest revenue of any food and beverage company in the world. 

What if, however, we said that Nestle consistently tries to be one step ahead in terms of marketing techniques and guidelines?

Regardless of whether they are offline or online, it has always concentrated on the most modern marketing techniques strategies.

You can learn how to create marketing strategies that generate a favourable response from customers by studying Nestle’s marketing strategies.

Let’s begin with the digital marketing strategies that Nestle must implement if they are to prosper as a brand.

Nestle: Partner with influential celebrities

Nescafe, a Nestle product, works with celebrities to promote their message and raise awareness of their brand.

They named Bollywood actress Disha Patani as their brand ambassador a few years ago.

Nescafe recently began a campaign called “Karne Se Hi Hona Hai,” which translates to “Only doing will make it happen,” and featured well-known content producers.

Also, they developed this campaign during the Covid Pandemic to motivate individuals and inspire them to keep striving for their goals regardless of their circumstances.

They appealed to India’s young with this campaign, encouraging them to dream, act, and succeed.

Nestle: Product localization

The process of localizing involves adjusting a company’s products for a certain market. On the numerous markets it presently manages, Nestle has invested much in localization.

Take Japan as an example, where the company’s main entry point was through chocolates infused with coffee.

Since Japan is typically a tea-drinking nation, the business created these candies to introduce children to the flavour of coffee.

When Nescafe and KitKat were added later, the rest is history.

Nestle: Co-branding

Do you know anything about Android KitKat?

Google and Nestle collaborated to create the Android KitKat operating system a few years ago.

Nestle sought to benefit from Google’s goodwill in light of a recent issue involving one of their pet products. This movie overcame the crisis and generated discussion.

Nestle has signed another agreement with Starbucks to accomplish two goals simultaneously.

First, the company started developing new products, like as roasted beans, and enhanced its reputation by learning about a variety of Starbucks Nespresso Capsules.

Did you understand how co-branding helped Nestle?

Co-branding is a fantastic way to expand your reach and enter a new market. Startups looking to build their brand or introduce a new product can profit from this marketing.

Finding businesses that complement your items and working with them to create co-branding promotional commercials might be beneficial.

Nestle: Content Marketing 

On the YouTube channels for each of its brands, Nestle has posted a lot of video content. The information includes cooking advice, educational “how-to” films, and greater insights on using the proper products.

As an illustration, the “Meri Maggi” channel has more than 530 videos and 5,71,000 subscribers.

Nestle has recognised various ways to provide essential information to its customers, despite the fact that video content is an emerging channel in its marketing strategy.

Nestle: Out-of-Home Advertising

Maggi, Milo, KitKat, and Nescafe are just a few of the Nestle brands that employ various techniques to get consumers’ attention.

Whether on benches, hoardings, or banners, Nestle’s brands have gained attention for their originality and contextual relevance.

What are the benefits of adopting OOH advertisements? First of all, most individuals understand these advertisements. They merit spreading.

Photographs can be taken online, sent to friends or family, and even discussed by marketers.

Additionally, they can inexpensively reach a large number of individuals with the aid of OTT.

Additionally, Nestle’s marketing tactics are excellent and bring in certain clients.

Nestle: Run marketing strategies that encourage connections and unite customers

The business issued a challenge to Arnaud, a regular 37-year-old man with 1,2000 Facebook connections, to catch up with them over a cup of coffee.

He therefore recorded these meetings and produced a 42-minute web video documentary from them. Arnaud and his friends had a cup of Nescafe throughout the sessions.

Social media users loved the documentary. On Facebook, it had nearly 8 million views, 63,050 likes, 4,850 comments, and 5,550 shares.

The number of admirers on Nescafe’s Facebook page increased by 400%.

The video generated excitement among viewers, who were eager to learn how to develop genuine relationships from their online friendships.

In response, it developed the “le Defi Nescafe,” a Facebook contest that gave victors the opportunity to reinvent the same experience.

More than 26,000 people submitted applications, almost 1,725 shared, and about 19,000 loved it.

Nescafe quickly rose to fame online by positioning itself as a product that fosters relationships and friendships.

Nestle’s Social Media Marketing Strategy

Instagram, Facebook, and Twitter are just a few of the three major social media networks where Nestle is present.

Nestle’s Social Media Presence

Let’s examine how it operates and what Nestle does on each social media site.

Nestle’s Facebook

Nestle India has designed its Facebook. It shares posts related to what Nestle India is currently up to. It also announces its new launches, talks about its corporate social responsibility (CSR) measures, etc.

It maintains separate pages for its brands such as Maggi, Kit Kat, Nescafe, Koko Krunch, etc. which also have an huge amount of followers.

• Maggi has around 16 million followers
• Nescafe has 36 million followers
• Kit Kat has about 11 million followers

Nestle’s Instagram

• Maggi has around 53K followers
• Nescafe has 30K followers
• KitKat has about 1 million followers

Having separate social media profiles for its various brands, helps them organize marketing campaigns effectively and thus resulting in a strong brand connection with its customers.

Nestle’s Twitter

Nestle India has been maintaining its Twitter profile as a medium of communication between the company and its audience. It also solves queries related to its products by replying to every comment and mentions done by the general public on the platform.

Nestle on Twitter has maintained separate profiles for its various brands. This helps them promote their products effectively.

Nestle’s YouTube

Nestle India’s YouTube channel has about 95K subscribers. On this platform, they post all the advertisements of their brands. However, Nestle maintains the same strategy of maintaining a separate profile for its various brands.

Nestle’s Pricing Strategy

The moment you make a mistake in pricing, you’re eating into your reputation or your profits.” Katharine Paine.

The most crucial factor for increasing sales is pricing. Harvard research show that a 1% rise in pricing results in an 11% increase in profits (approx.). Every time a transaction is made and the price structure is off, the company loses money. Consequently, accurate pricing is essential.

A multinational company called Nestle currently has a net worth of around $270 billion. The brand’s price strategy is what has contributed to its success.

Nestle’s revenue is steadily increasing, which shows that its products were successfully identified and positioned in the market. In general, Nestle’s products are more expensive than those of the retailing brand.

In comparison to other brands, Nestle’s pricing strategy is very unique. It simply depends on recognition, which is linked to the product’s apparent excellence. Nestle evaluates the price plan it wishes to use based on this quality and the attitude of the customers.

Here are some of the strategies that Nestle has used to accomplish its objectives.

1- Price Skimming: Nestle

When using price skimming as a pricing strategy, a business sets its price high at first then gradually reduces it.

When Nestle enters a new market, it practices price skimming for some of its products. Upper-middle-class consumers were regarded by Nestle as the product’s target market.

Later, as a result of the effectiveness of this strategy and approach, they cut the prices and focused on the middle class.

2-Inexpensive Pricing Strategy: Nestle

Nestle has a large number of brands and a variety of products, many of which are priced fairly. Market segmentation is used to determine pricing. Target audiences are typically included in market segmentation.

The method of segmenting a market involves breaking it up into smaller sections. Depending on needs, psychographic, behavioral, and demographic factors, it divides into subcategories.

Nestle uses a cheap price strategy rather than an expensive one if it wants to appeal to the mass market.

In the instance of Nestle’s Maggi noodles, this took place. Compared to other Nestle products, it is regarded as being reasonably priced. However, Maggi may appear to be a little expensive when compared to other noodle brands on a global scale. Bundle price strategy.

Nestle has gradually come to understand that people prefer to buy their groceries in bundles rather than doing their shopping every day. Nestle therefore adopted the bundle packs strategy.

Maggi was initially available in a single pack, but Nestle later provided a 16 pack, which ultimately enhanced sales.

3- Penetration Pricing Strategy: Nestle

Offering new items at lower prices than competitors in an effort to attract more customers away from them is known as penetration pricing.

To draw in new customers, Nestle offered a new flavor of Maggi instant noodles at a discounted price of £2.25. The goal of Nestle’s plan was to steal more customers away from its competitors who were charging £3.25 for similar flavors. Nevertheless, Nestle raised the price to £3 as their client base grew.

4- Psychological pricing strategy: Nestle

Pricing that appeals to the consumer’s psychology makes it easier for them to develop a favorable psychological impact over them and make a purchase.

Instead of costing £9, Nestle Aero bliss was marketed for £8.99. This pricing strategy will influence the consumer’s psychology favorably and encourage them to purchase the product.

5- Stock Keeping Units: Nestle

Because Nestle does not want any customers to leave, it offers a range of prices for each stock-keeping unit, enabling it to appeal to a wider audience. Nestle has everything covered, offering several pack sizes for products like Maggi noodles and cereals.

Cereal from Nestle is a little more expensive than other brands.

As a result, it began providing tiny pouches for everyday use. This has made the pouches far less expensive than larger packs, enabling various customer segments to purchase Nestle’s products.

6- Discounts offered: Nestle

Nestle provides discounts at a variety of retail stores. Nestle items frequently come in bundles and are discounted by 5% or 10%.

It is less expensive to purchase coffee and creamer together than to do it individually.

7- Competitive pricing strategy: Nestle

Analyzing the pricing policies strategies of its competitors is another broad strategy that Nestle employs. Nestle has a number of brands, and each brand has a distinct department that analyses the pricing tactics of its competitors.

Additionally, it looks at the sales, innovation, and marketing strategies of competitors. As they take into account consumer preferences, Nestle’s competitive pricing strategy helps them to achieve their desired position.

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Global pricing strategies of Nestle

Nestle makes an effort to implement pricing strategies that would help it achieve its financial goals globally. These strategies frequently use the penetration and skimming strategies.

When Nestle products are exported to foreign countries, their prices inevitably increase. As an alternative, it also employs price skimming, which involves setting a higher price initially and then lowering it in response to customer demand.

Nestle has developed into one of the top parent companies with prosperous branches operating under its umbrella. Nestle has been successful with consumers because it adapts to various price tactics based on the places it sells in and the products it offers.

It prioritizes the needs of its clients and works to offer the highest-quality goods in a variety of price ranges so that all consumer groups can afford its goods, hence boosting sales and profitability for the business.

Nestle Company’s pricing strategy- Key Insights

✔Heinrich Nestle established Nestle in Switzerland in 1866.

✔Nestle was initially developed by Heinrich for the purpose of supplying milk formula for infants. He discovered that it could be made from powdered milk, sugar, and other natural foods.

✔A multinational company called Nestle has a current net worth of roughly $270 billion. The brand’s price strategy is what has contributed to its success.

✔Compared to other brands, Nestle’s pricing strategy is very unique.

✔Price skimming, inexpensive and bundle pricing, penetration pricing, stock keeping units, psychological pricing, discounts, and competitive pricing are some of the pricing strategies that Nestle employs.

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• Target Market Strategies | Undifferentiated, Differentiated, Concentrated Marketing
• STP Process | Segmentation, Targeting, Positioning
• Market Segmentation | Types, Benefits of Segmentation
• 5 Stages of Consumer Adoption Process

Upcoming plans of Nestle

According to Nestle’s CEO Mark Schneider, the business intended to invest Rs. 5,000 crores in India over the next three and a half years.

The FMCG company, which owns nearly 2,000 brands worldwide, is certain that this move will enable Nestle to strengthen its core operations in India and take advantage of fresh development prospects.

It is the company’s largest investment in India since it began producing goods there.

Other articles

Please read through some of our other articles with examples and explanations if you’d like to learn more about marketing.

• Human Resource Management
• Management Information System
• Why is Information Governance Important?
• How Data Analysis Is Changing Information Governance?
• The St. Gallen Management Model
• System-Oriented Management
• Tools Transforming Knowledge Management
• Levels of Management
• Information Management Software 
• Tools for Information Management
• Information Governance vs Records Management
• Management Information System Books
• Greenwashing: A Case Study on DWS
• Greenwashing Examples
• PLS-SEM model
• Principal Components Analysis
• Multivariate Analysis
• Friedman Test
• Chi-Square Test (Χ²)
• Effect Size
• Strategic marketing planning
• Marketing Environment
• Consumer buying decision process
• Factors Influencing Consumer Behavior
• Product Positioning
• Target Market Strategies
• Market Segmentation
• STP Process
• Data Analysis Process
• Consumer Adoption Process
• Product Life Cycle
• Product Attributes
• Price Discrimination
• Service-Based
• Company Vs. Product-Based Company
• Product Classification
• Penetration Pricing and Price Skimming
• Fast-Moving Consumer Goods
• Motorola’s Customer-Defined, ‘Six-Sigma Quality
• PEST And a SWOT Analysis
• Web Design Company Vs. a Web Designer
• Internal and External SWOT Analysis
• Strategic Opportunism

Marketing Analysis

• Louis Vuitton
• ChatGPT For Keyword Research
• Prompts for New Business Idea Generation
• ChatGPT Business Entrepreneur
• Learn Languages with ChatGPT
• Use ChatGPT on WhatsApp
• ChatGPT as Virtual Research Assistant
• ChatGPT for Meta-Analysis in Research
• ChatGPT For Large Documents
• ChatGPT for Hypothesis Development
• ChatGPT for Text Analysis
• ChatGPT to Write Code in Python
• ChatGPT to Write Literature Review
• Books ChatGPT

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I love how you break down the different target markets for Nestle. This is so helpful for businesses trying to figure out where to focus their marketing efforts.