Naziya...Grp-C Nestle Case Ppt
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Transcript of Naziya...Grp-C Nestle Case Ppt
International Marketing: Case Study - 4
Group-C:Shyam Devikar (6)Sachin Khochare (13)Naziya Maknojia (17)
Pradeep Poojari (22)Mehul Shah (27)Manish Singh (31)Sammir Vichare (35)
27/2/2011
An Overview of NestleHistory of Nestlé
• Nestlé began in Switzerland in the 1866 when founder Henri Nestlé created one of the first baby formulas; realized the need for a healthy and economical product for babies.
• Nestlé developed its own condensed milk to contend with its competitor, the Anglo-Swiss Condensed Milk Company.
• The Anglo-Swiss Condensed Milk Company made products like cheese and instant formulas.
• The two companies merged in 1905, the year after Nestlé added chocolate to its line of foods.
• Acquisitions continued through out 1960s and 1970s - including Crosse& Blackwell (1960)
Factors : Decentralization V/s CentralizationInternal Factors Environmental Factors Nestle Way Case Facts
Emerging Markets Centralized Acquisitions
Cross Cultural Preferences De-Centralized Maggi-775 products
Marketing Strategy Centralized/ De-Centralized
Multi-Domestic
Product Positioning
De-Centralized Instant Noodles-Diff. Target Customers
Product Pricing De-Centralized Germany v/s France
Product Packaging De-Centralized Instant Noodles
Distribution De-Centralized No Production Unit -Import; Kenya Infrastructure
Advertising/ Promotion
De-Centralized Nescafe; T V v/s Tape Promotion
Branding Centralized with exceptions
Instant Noodles-Diff. Brand Names
Nestle: Decentralized / Influence of Center
Not Completely De-centralized…Nestle – A “glocal” company
• that thinks global• but acts local
Nestle prefers • brand to be local• people to be regional • only Technology goes global
Centralized Decentralized
Regional Responsibility Country Operation
Financial Function Country Revenue
Technical Function Country Profits
IT Function Country Production
HR Function Country Marketing
Country Administration
GLOCAL
Nestle: Role of Product Director• Serves as a link between the Centre & different regions. • Establish global or/& regional product market strategies.• Co-ordinate marketing guidelines (branding, positioning, packaging
and advertising guidelines) & approvals from Centre• New product development/Product Extensions
To Secure Co-operation of the Country Organization:
• Ensure cross fertilization / knowledge transformation• Provide operation assistance (markets-lack of skills achieving the
strategic goals)• Encourage local country manager’s–new ideas• Enhance their skills by training & job rotation• Avoid biasness or preferences of specific country
(Irrespective of its size , business volume & profit generated)• Center should not ignore untapped/blue ocean markets in developing
countries.
Nestle: Problems- Area of New Products
• Very less role of Local Manager in NPD i.e., Idea Generation.
• To much decision points(PD, RM, CM, RECO) at different areas -
rejection of ideas.
• Prepositioning by Center V/s Post-positioning by countries.
• Infrastructure Challenges (India – Power cut – Refrigeration?)
• Cultural Differences – Nestle Purina
• Trademark infringement – India
Nestle: Role & Approach of Centre
2 Perspectives of Nestle Executives
MOST- “Country managers had to have decision–making authority commensurate with their profit responsibility.”
MANY- “Autonomy of the country organizations reduced nestle’s ability to capitalize on the size and collective wisdom of corporation.”
Nestle: Role & Approach of Centre
1st Case: Expanding the ‘maggi’ culinary product line in Mexico:
• ‘Momentos Maggi’ advertising campaign and ‘Koch Studio’ concept.
• Center was flexible enough to be more decentralized & mature enough to understand the different needs of different market.
• Nestle developed a video tape rather than a film in television ( for Mexico).
• This tape will differ in each country depending on the local recipes sold under ‘maggi’ brand.
Nestle: Role & Approach of Centre
2nd Case: Instant noodles successful launch in West Germany , France , Switzerland, Austria & Norway:
• Nestle faced price competition from Knorr. • Failure in packaging aspect.• Under such circumstances , center role should be centralized
& enforce standardization to achieve the economies of scale in packaging by reduction in 20 % variable cost.
• This centralized action should be accepted by all countries to overcome the competition .
• For some elements of Marketing Mix , Individual countries should follow the center call to be more feasible with greater efficiency & productivity.
Nestle: Today
The Nestle Way: Evolution Not Revolution• Nestle is the world’s biggest marketer of infant formula,
powdered milk, instant coffee, chocolate, soups, and mineral water.
• Nestle strategy to dominate markets – 4 points:• Think and plan long term• Decentralize• Stick to what you know• Adapt to local tastes
• Long-term strategy works for Nestle because the company relies on local ingredients and markets products that consumers can afford.
• Nestle Continuous Excellence (2008) – enhances operations and encourages employees to bring new ideas @ Nestle