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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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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.

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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Nestle Marketing Strategy: Building Trust, Boosting Sales

Archana Karthikeyan , Apoorva Bajj

Nestle is one of the world's largest food and beverage companies, with a rich history dating back over 150 years. Founded in Switzerland in 1866 by Henri Nestle, the company began as a producer of infant formula but soon expanded into chocolate and other food products. Today, Nestle has a presence in 188 countries and employs over 270,000 people worldwide.

The company's sales have grown steadily, with net sales of CHF 93 billion in 2023. Nestle is also consistently ranked among the top food and beverage companies in the world, with a strong brand reputation and a diverse portfolio of products.

Nestle has also made significant contributions to society and the environment. The company has set ambitious sustainability goals, including achieving zero net greenhouse gas emissions by 2050 and using 100% recyclable or reusable packaging by 2025.

Nestle, the leading health, nutrition, and wellness company, has been catering to the needs of consumers and their families worldwide for over a century. With a market cap of $266.16 billion (May 2024) and ranking as the world's 37th most valuable company by market cap, Nestle has established strong customer loyalty by consistently delivering high-quality products that enhance the lives of its consumers.

The brand's mission of " Good Food, Good Life " is not just a catchy slogan, but a commitment to providing nutritious and delicious products that promote a healthier lifestyle. From infant formula to pet food, Nestle has an extensive portfolio of brands that cater to the diverse needs of consumers across the globe. The company's well-crafted and consistently implemented marketing strategy has helped Nestle stand out in the market and carve a distinguished presence.

Nestle - Target Market Nestle - Marketing Mix

Nestle Product Strategy

Nestle pricing strategy, nestle place strategy, nestle promotion strategy.

Nestle - Marketing Strategy Nestle - Marketing Campaigns

Nestle - Target Market

Nestle’s extensive portfolio of products caters to a diverse range of consumers across the globe. Nestle's target market can be divided into several segments based on demographic, geographic, and psychographic factors.

Demographically, Nestle’s target audience includes individuals of all ages, from infants to seniors. The brand’s infant formula products cater to new mothers, while its chocolate and confectionery products appeal to children and young adults. Nestle’s range of coffee and tea products targets adults, while its health and wellness products cater to seniors.

Geographically, Nestle has a global presence, with its products available in 188 countries. The brand’s target market includes individuals from different cultures and backgrounds, and Nestle has adapted its marketing strategies to cater to local preferences and tastes.

Psychographically, target audience of Nestle includes health-conscious individuals who are looking for nutritious and wholesome products that enhance their overall well-being. The brand’s focus on health and wellness has made it a popular choice among consumers who are looking to lead a healthier lifestyle.

In addition to the above factors, Nestle’s target market also includes pet owners, as the brand has a range of pet food products.

Nestle’s target market is also diverse in terms of income level, with products available at various price points to cater to different budgets. The brand's target audience includes individuals from all walks of life who are looking for high-quality, nutritious, and delicious products that enhance their overall well-being.

Nestle - Marketing Mix

Nestle’s success can be attributed to its well-crafted marketing mix . The brand has been able to meet the diverse needs of its consumers by creating a product portfolio that caters to different segments of the market. Nestle’s marketing mix comprises the four Ps - product, price, place, and promotion - which the brand has consistently implemented to establish a strong presence in the market.

Let’s take a closer look at Nestle’s marketing mix and explore how the brand has been able to maintain its competitive edge in the highly competitive food and beverage industry.

Nestle offers a diverse range of products, including food, beverages, pet food, and health and wellness products. The brand's product portfolio caters to different segments of the market and includes well-known brands such as Nescafe, KitKat, and Purina . Nestle's products are of high quality and cater to consumers' diverse tastes and preferences.

Nestle’s pricing strategy varies depending on the product category and target market. The brand’s premium products, such as gourmet coffee, are priced higher, while its everyday products, such as instant coffee, are priced lower to appeal to budget-conscious consumers. Nestle’s pricing strategy is also influenced by local market conditions and competition.

Nestle has a global presence, with its products available in 188 countries. The brand’s distribution channels include supermarkets, convenience stores, online platforms, and direct-to-consumer channels. Nestle’s distribution strategy is aimed at maximizing reach and accessibility to consumers across the globe.

Nestle’s promotion strategy includes advertising, sales promotion, public relations, and personal selling. The brand’s advertising campaigns , such as the “ Good Food, Good Life ” campaign, focus on promoting the health and wellness benefits of its products. Nestle also uses sales promotions, such as discounts and coupons, to incentivize consumers to try its products. The brand’s public relations efforts focus on building brand reputation and engaging with consumers through social media and other channels.

Nestle’s marketing mix has been instrumental in the brand’s success in the highly competitive food and beverage industry. The brand’s focus on creating high-quality products that cater to diverse consumer needs, coupled with a well-crafted pricing, distribution, and promotion strategy has helped Nestle maintain its position as a leading player in the market.

Nestle - Marketing Strategy

Nestle is one of the largest food and beverage companies in the world, with a presence in more than 190 countries. The company's success can be attributed to its innovative marketing strategies . Let's have a look at the top marketing strategies of Nestle that helped it to gain success.

Product Innovation

Nestle has been known for its product innovation . The company has a dedicated research and development team that is always working on new product ideas. Nestle's products are often the first of their kind in the market, and they are designed to meet the changing needs of consumers.

Targeted Marketing

Nestle uses targeted marketing to reach specific groups of consumers and it is one of the top marketing strategy of Nestle. The company understands that different groups of consumers have different needs and preferences, and it creates marketing campaigns that speak to those needs.

Celebrity Endorsements

Nestle has employed the use of celebrity endorsements to promote its products. For example, the company has used celebrities like Shah Rukh Khan and Deepika Padukone to promote its products in India.

NESCAFÉ Cold Coffee Full Ad

Social Media Marketing

Nestle has a strong presence on social media platforms like Facebook, Twitter, YouTube, and Instagram. The company uses these platforms to engage with consumers, promote its products, and build brand awareness. Nestle's social media marketing strategy focuses on engaging content and customer interaction. It also actively responds to customer queries and feedback, building a community around its brands. This marketing strategy of Nestle helps to increase its brand awareness and maintain meaningful connections with consumers.

Co-Branding

Nestle has used co-branding to promote its products. Under this marketing strategy, Nestle has partnered with Starbucks to launch a range of coffee products under the Nescafe brand.

Sampling Programs

Nestle has used sampling programs to introduce its products to consumers. The company offers free samples of its products to consumers, which helps to increase product awareness and generate word-of-mouth publicity.

Strategic Partnerships

Nestle has formed strategic partnerships with other companies to promote its products. For example, the company has partnered with Coca-Cola to launch a range of iced tea products under the Nestea brand .

Cause-Related Marketing

Nestle has used cause-related marketing to promote its products. The company has partnered with organizations like UNICEF to support various causes, and it has used these partnerships to promote its products.

SEO Strategy

Search Engine Optimization plays an important role in improving the visibility of a website's position in search results. It helps to get traffic from organic, free, and natural search results. Nestle understands the value of all kinds of marketing strategies and effectively optimizes its website .

According to UberSuggest, as of May 2024, Nestle's website has around 271,043 organic keywords and more than 2,123,794 monthly organic visitors. These impressive numbers show Nestle's commitment to utilizing SEO to maximize its online visibility and reach.

Event Sponsorship

Nestle has sponsored various events to promote its products. The company has sponsored events like the Nestle Good Food, and Good Life Festival , which promotes healthy eating habits.

Digital Marketing

Nestle has used digital marketing to reach consumers. The company has created digital campaigns that are engaging and interactive, and it uses digital channels to promote its products and engage with consumers. This marketing strategy of Nestle has brought increased brand visibility, enhanced consumer engagement, and significant growth in online sales and brand loyalty.

Nestle's marketing strategy has helped the company appeal to every consumer, have a multifarious portfolio, attract cost-conscious prospects, set consistent goals, try product-driven advertising, localize products, maintain brand equity, co-branding, promote sustainability, and use digital marketing. These strategies have helped Nestle to maintain its position as a global brand and remain competitive in the food and beverage industry. Nestle's marketing strategies have been effective in driving sales, building brand equity, and maintaining a positive brand image.

Nestle - Marketing Campaigns

Nestle is a household name, and its marketing campaigns have played a significant role in making it a global brand. Over the years, Nestle has launched numerous successful campaigns, but some have stood out from the rest. Let's take a look at Nestle's most successful campaigns that have captured the hearts of millions.

Nescafe “Open Up” Campaign

The Nescafe “ Open Up ” campaign is one of the most successful campaigns by Nestle. The campaign aimed to encourage people to connect with each other over a cup of coffee. The ad featured people from different walks of life sharing their stories over a cup of coffee. The ad struck a chord with people, and it became an instant hit.

Open up - Nescafe

KitKat “Take a Break” Campaign

The KitKat “ Take a Break ” campaign is one of Nestle's most iconic campaigns. The campaign featured the famous “Have a Break, Have a KitKat” tagline. The ad portrayed people taking a break from their busy lives and enjoying a KitKat. The catchy jingle and the memorable tagline made the ad an instant hit.

KitKat Have a break Have a KitKat

Maggi “2-Minute Noodles” Campaign

The Maggi “ 2-Minute Noodles ” campaign is one of Nestle’s most successful campaigns in India. The campaign aimed to target busy moms who wanted to prepare a quick and tasty meal for their kids. The ad featured a young boy who came home from school and asked his mom to prepare Maggi noodles. The ad’s catchy jingle, “ Maggi, Maggi, Maggi ”, became a household name in India.

OLD INDIAN ADs -Maggi

Nestle's “Good Food, Good Life” Campaign

The Nestle “ Good Food, Good Life ” campaign is one of Nestle’s most ambitious campaigns. The campaign aimed to promote a healthy lifestyle and encourage people to make healthier food choices. The ad featured people from different cultures enjoying Nestle's products as part of a healthy lifestyle.

Nestlé Good Food, Good Life

Nestle’s marketing campaigns have been highly successful, and they have played a significant role in making it a global brand. These campaigns have bold, told compelling stories that have resonated with people across the globe.

Nestle's "Generation Regeneration" Campaign

Generation Regeneration is Nestlé's sustainability initiative , emphasizing its dedication to environmental and social responsibility. Through sustainable sourcing and reducing environmental footprint, Nestlé aims to create a positive impact while ensuring a sustainable future. This campaign aligns with Nestlé's long-term vision of becoming a sustainable and trusted leader in the food and beverage industry .

Generation Regeneration | Nestlé's Sustainability Promise

For marketers and start-ups looking to learn from Nestle's success, it is important to understand the value of having a diversified portfolio, setting consistent goals, and tailoring products and marketing campaigns to local tastes and preferences. Digital marketing is a powerful tool that should not be overlooked, as it allows brands to engage with consumers across multiple platforms and target specific consumer segments with personalized messaging.

Nestle's marketing strategies serve as a valuable case study for businesses looking to build a strong brand and maintain a competitive edge in today's crowded marketplace. By taking a holistic approach to marketing, focusing on product quality, sustainability, and consumer engagement, businesses can create a lasting impact and drive growth for years to come. So, don't hesitate to take a cue from Nestle and implement these strategies in your own business.

What is the target market of Nestle?

Nestle’s target market includes individuals of all ages, from infants to seniors. The brand’s infant formula products cater to new mothers, while its chocolate and confectionery products appeal to children and young adults. Nestle’s range of coffee and tea products targets adults, while its health and wellness products cater to seniors.

What is Nestle's iconic tagline?

The iconic tagline of Nestle is "Good Food, Good Life".

What are the top marketing strategies of Nestle that helped to maintain its position as a global brand?

Here are the top marketing strategies of Nestle -

Product InnovationTargeted MarketingCelebrity EndorsementsSocial Media MarketingCo-BrandingSampling ProgramsStrategic PartnershipsCause-Related MarketingEvent SponsorshipDigital Marketing

How does nestle promote their products?

Nestle promotes its products through various digital channels, including social media and online advertising. They also utilize traditional marketing methods such as TV commercials, print ads, and in-store promotions to reach consumers.

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Successful Marketing Strategies of Nestle (With Campaign Examples)

Nestle’s marketing strategy complements its tagline, “Good Food, Good Life,” with campaigns that convert. 

From Nestle’s social media strategy to its in-store promotional banners, the brand’s marketing strategy is a testament to Nestle’s mission of harnessing the power of food to raise people’s standard of living. 

Nestle holds a 34.9 percent regional share of worldwide sales. Understanding Nestle’s branding strategy, therefore, is no less than a masterclass on consumer engagement and brand loyalty. 

So, what makes Nestle the brand that it is today? 

Let’s take a nose-dive into the marketing mix strategy of Nestle to begin with.

Nestle’s Marketing Mix Strategy

We’ll look closely at Nestle’s marketing strategy through campaigns to understand what works for the brand and why. 

However, learning about the 4Ps of Nestle’s marketing mix is a mandatory prior step. It explains its product, place, promotion, and pricing strategy, which will give you an overview.

Let’s go through each marketing mix strategy of Nestle one by one:

Nestle’s Product Strategy

When we think of Nestle, it’s almost impossible to pinpoint a specific product that stands out because the brand has so much to offer!  

Yes, Nescafe and Maggie collectively pop up in our heads, but the brand offers products from over 8,000 categories . (What!)

The primary product categories include: 

• Packaged meals,
• Cooking aids,
• Milk-based products, cereals, baby food,
• Coffee (Nescafe),
• Liquid and powdered products such as coffee powder, milk powder, etc. 

Diversity is the word that explains Nestle’s product strategy, and diverse products for diverse audiences. Basically, Nestle’s marketing mix and its product variety have everything—well, for everyone! Plus, the brand doesn’t shy away from acquiring sectors that align with its core values, making Nestle’s acquisition strategy a core driver of its growth. 

Nestle’s Pricing Strategy

Following the cost-based product strategy, Nestle eventually paved its way to bundle pricing, which is a key player in Nestle’s marketing mix.

The brand discovered customers don’t buy their groceries daily but prefer buying in bulk, resulting in a bundle pricing strategy for products such as Maggie. 

Two different approaches are taken in Nestle’s pricing strategy: 

• It offers price discounts and promotions for fast-moving consumer goods. 
• It keeps the price high for premium products such as gourmet chocolates to keep its brand image intact. 

The pricing strategy of Nestle increases consumer friendliness while maintaining a solid brand image.

Nestle’s Place Strategy

Simply put, Nestle ensures each consumer gets the product when they enter a store. The brand makes this possible by spreading its presence in over 187 countries.

Apart from a global presence and leveraging a vast network of subsidiaries and distributors, Nestle,

• Focuses on optimizing its supply chain to reduce costs and enhance product delivery times,
• Has a designated distribution channel for medical nutrition or pet care products,
• Adheres to manufacturing policies that fulfill food safety, quality standards, and regulations,
• Cares about zero waste.

So, how does Nestle make sure that a KitKat in Japan tastes just right for the local crowd, or that a bowl of Maggi noodles hits the spot in India? Well, it’s all about Nestle’s localization strategy. They always integrate their products into different cultures in a way the locals love. They dive deep into local cultures, work hand-in-hand with the community, and even source locally to make sure everything from the taste to the packaging feels like it’s made just for you.

Nestle’s Promotion Strategy

Like any other FMCG brand, Nestle persuades its customers to buy their products. However, instead of only offering discount coupons and offers, Nestle’s promotion strategies focus on emotional connections, health, and quality of lifestyle.

• Nestle leaves no stone untouched when advertising on multiple platforms, including social media, television, print, and websites.
• The brand posts valuable content on nutrition, lifestyle, recipes, etc., to educate its customers. 
• It collaborates with chefs and nutritionists to promote its products. 
• It encourages impulse purchases with eye-catching in-store displays.  

Some of its best promotional strategy examples are those of Maggi and Kitkat. Consumers know that Maggi is that “made in two minutes” snack, while “Have a break, Have a KitKat!” is a tagline that stays with them.

With a perfect blend of online and offline marketing, Nestle’s advertising strategy makes it challenging for consumers to unsee its products! 

Now that all the P’s and the marketing mix of Nestle are done, it’s time to take a step further!

Digital Marketing Strategies of Nestle Explained with Campaigns

Nestle’s digital marketing strategy starts and ends with people. All their campaigns have an authentic connection with their audience. Looking closely at all its marketing campaigns, we find that they bring people together and sell products through them.

How exactly does it manage to do so? Let’s find out through diving deep into Nestle’s marketing world! 

Sustainability and Ethical Sourcing – “Generation Regeneration” Campaign

This marketing campaign by Nestle focuses on the two P’s: people and planet. At the heart of Nestle’s strategy is its commitment to sustainability and ethical sourcing, making the “Generation Regeneration” campaign a prime example of how the company integrates these values into its marketing efforts.

The campaign “Generation Regeneration” embodies Nestle’s firm belief in restoring our planet’s resources, making this campaign a transformative change. While Nestle’s Nescafe holds a special place in the hearts of its consumers, it leaves an even more solid mark in the digital landscape for implementing sustainable practices to grow coffee. 

“We are generation regeneration. And so are you!”

The brand launched a video in 2020 with this message as a part of the marketing strategy of Nestle, of course. The video has people of varying ages, ethnicities, professions, and demographics proudly pronouncing that they’re all part of a generation that believes in regenerating.

Intending to renew, restore, and protect our environment, it focuses on improving farmers’ livelihoods, eventually enhancing the well-being of communities and consumers. Through the Nestle plan for farmers, 

• Nestle supports farmers by co-investing with them in terms of loans for equipment. 
• It applies state-of-the-art technology to develop higher-yielding coffee with minimal environmental impact. 
• It pays premiums for raw materials produced during regenerative agriculture practices.  

The campaign, or rather, a movement, isn’t just words. Aiming to implement regenerative practices spread over half a decade, Nestle works closely with 30 dairy farms in 12 countries to enforce zero greenhouse emissions. 

Nestle’s website has articles on regenerative system implementations and how they help communities and the environment.

The campaign recently earned the first spot in the Coffee Barometer’s 2023 Coffee Brew Index for sustainable coffee! 

View this post on Instagram A post shared by Nestlé (@nestle)

A campaign such as this works since it sparked regenerative agriculture across the brand’s supply chain, eventually enhancing their consumers’ health! This reflects Nestle’s digital marketing strategy of leveraging environmental responsibility to foster deeper connections with consumers.

You can reach out to reputed FMCG marketing companies if you want to devise such a memorable campaign! 

Wellness and Nutrition Promotion – “Healthy Kids” Campaign

With yet another fun and creative social media campaign, Nestle launched “Healthier Kids” with the intent to ensure healthy eating habits from a young age. This initiative is part of Nestle’s strategy to promote wellness and nutrition, illustrating the company’s dedication to public health as a cornerstone of its marketing approach.

The campaign supports parents and caregivers to inspire children aged 3 to 12 to live healthier lives. How? 

Well, spewing advice about healthy eating habits is one thing, and becoming a partner and a mentor throughout the journey is another. Nestle chooses to be the latter for parents. Under this campaign, the brand aims to help 50 million children lead healthier lives by 2030.

The brand already follows regenerative practices for healthier product development; however, it urges equal efforts from parents to raise healthy kids through this campaign.  

What all comes under the campaign? 

• Nutrition education with school programs, 
• Everyday tips and healthy recipes,  
• Lessons and worksheets, 
• Educational videos, 

To foster health and nutrition, any FMCG brand can focus on the following:

Inspiring kids to eat healthy 

Offering healthy products  

Nestle does both. In an attempt to inspire kids to eat healthy, it launched cooking workshops and emphasized involving kids in cooking. 

The video showcases kids preparing a healthy meal for their parents, followed by parents getting involved in cooking a healthy meal. After children participate in the program from 84 countries, Nestle rightfully believes that involving kids in cooking develops healthy eating habits.

The website also has healthy and tasty recipes to cook with the kids!

The campaign spreads awareness about the need to ensure children get proper nutrients to grow, successfully targeting the two primary audiences: caregivers and kids!  This aligns with Nestle’s overarching strategy of engaging with families through educational content and interactive experiences to promote a healthier future.

Diversity and Inclusion Effort – “Empowering Women” Campaign

What if we told you that you don’t need your consumers to go all gaga over your brand with outstanding campaigns? 

It’s easy to subscribe to the notion that campaigns are always consumer-centric. While the inherent focus is to generate brand awareness among consumers, it’s not the sole intention. Nestle keeps breaking the stereotype time and again, whether by disrupting its supply chain or implementing gender neutrality at its workplace. 

Nestle’s dedication to gender equality and empowerment forms a critical component of its corporate social responsibility strategy, which is seamlessly integrated into its marketing narrative through the “Empowering Women” campaign.

Through the “Empowering Women” campaign, the brand focuses on empowering women within its workforce. It stresses the importance of education through tailored agricultural training programs, improving women and broader communities. 

For example, with the Nestle cocoa plan, women of the Ivory Coast earn their living by growing coffee and cocoa. 

One of the cooperative farmers in the video says, “Nestle has provided them with a nursery for free to grow cocoa and they’re happy working!”

Along with women’s empowerment, the campaign promotes: 

• Diversion, 
• Inclusion, 
• Sustainable supply chain. 

The brand also launched a video on International Women’s Day this year discussing the importance of finding a woman’s authentic self in the workplace. Nestle’s social media strategy conveys the message of enhancing gender balance in the workforce through gender-neutral internal policies. 

This campaign works as it addresses the ongoing frustrations of societal values and fosters community engagement, creating a change cycle for its workforce and society. 

By highlighting its commitment to empowering women, Nestle leverages this campaign to further its brand values of diversity and inclusion, demonstrating how its digital marketing strategies are intricately linked to its corporate values and social responsibilities.

Nestle’s Social Media & Advertising Campaigns

The world of Nestle is about the stories they tell and the hearts they touch. 

Let’s see the magic of their campaigns, where creativity meets coffee cups and chocolate breaks, and see how they’ve turned everyday moments into something truly memorable.

KitKat’s “Celebrate the Breakers” Campaign Redefines Breaks

Through the “Celebrate the Breakers” campaign, KitKat transforms the simple act of taking a break into an engaging narrative. Employing animated stories and captivating social media content, KitKat reasserts its position not merely as a chocolate brand but as an integral part of life’s memorable moments.

Nescafe’s “Mean Girls Limited Edition” Post Generates Nostalgia

Coffee Mate’s Instagram post employs a lighthearted approach to promote their limited-edition “Mean Girls Pink Frosting Flavored Creamer.” 

View this post on Instagram A post shared by Coffee mate (@coffeemate)

They leverage nostalgia for the film by referencing Regina George’s iconic line and repurposing a humorous “burn book” tweet. The post highlights the absurdity of judging coffee preferences while subtly suggesting that embracing the pink creamer embodies the movie’s message of individuality. 

Nescafe’s “Open Up” Chronicles Invite Meaningful Conversations

Nescafe encourages a moment of pause to foster connections. This campaign effectively highlights how Nescafe serves as a catalyst for meaningful conversations, demonstrating the brand’s commitment to creating genuine moments of connection over a cup of coffee.

Nespresso and George Clooney’s Partnership Goes Beyond Coffee 

Featuring George Clooney , Nespresso’s campaign extends beyond the allure of premium coffee to emphasize sustainability and responsible choices. This collaboration not only enhances the brand’s appeal but also aligns Nespresso with important social and environmental values.

A Day of a Purina Pup Shows What Is Pawdorable

Purina’s Instagram has recently treated us to some heartwarming content, giving us a glimpse into the daily life of the “pawfficial” pup, Bambi, and her devoted human, Dan, who also happens to work as a strategist at Purina. Instead of the typical office settings, this charming video takes us on a journey through their everyday adventures, showcasing Bambi’s remarkable focus as she actively participates in meetings.

Bu gönderiyi Instagram'da gör Purina (@purina)'in paylaştığı bir gönderi

“Really Friends?” Explores the Essence of Friendship with Nescafe

Through a compelling documentary, Nescafe delves into the true meaning of friendship in the digital era. This initiative effectively demonstrated the brand’s understanding of contemporary social dynamics, using coffee as a means to transform digital connections into real-world interactions.

There are plenty more where they came from: Check out our blog post about Nescafe’s marketing strategy and campaigns !

In Summary 

As observed in the article, all campaigns revolve around people, be it through sustainability or educational programs to teach healthy eating habits or promote gender equality in the workforce. The brand successfully connects people regardless of their age or background, making it one of the top five FMCG companies in the world! 

As an FMCG brand, your aim should be to make the consumers’ lives simpler and healthier, and it’s always the right time to determine whether your brand falls heavier on one side than both! To learn more about this niche, including how to craft your 4Ps that resonate with your audience as effectively as Nestlé’s marketing mix, check out our FMCG marketing articles !

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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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Nestlé: Branded active benefits

Part of a case series on marketing innovation, the Nestle Branded Active Ingredients describes how Nestle developed its strategy of marketing key functional ingredients for some of its leading food brands across different markets. The underlying concept behind this idea was to build brand sustainability and translate complex scientific arguments into simple messages that consumers could understand. This approach was similar to the ingredient marketing strategy of non-food brands such as Gore-Tex or Intel. After overcoming internal doubts and resistance, the project team went on to develop one of the most innovative marketing strategies for the food business and helped some of Nestlé’s existing brands become unrivalled market leaders in their categories.

This case can be used to 1) show how innovative ideas can be “borrowed” from totally different product categories; 2) highlight how scientific arguments when translated into benefits that consumers understand can become a powerful reason to buy; 3) show why marketing teams need to develop effective internal communication to win support for their ideas 4) demonstrate how an innovative idea can change and mature in its many iterations before reaching the market. The case can be used alone or in with one or more of the other cases in the series on marketing innovation.

The Case Centre

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Nestle: A Look at the Marketing Strategies and Global Presence

Nestle: A Look at the Marketing Strategies and Global Presence 15 min read

Nestlé is a Swiss multinational food and drink processing conglomerate corporation headquartered in Vevey, Vaud, Switzerland . It is the largest food company in the world, measured by revenue and other metrics. Nestlé has over 2000 brands ranging from global icons to local favorites, and it is present in 191 countries around the world.

Nestlé was founded in 1866 by Henri Nestlé , a Swiss chemist and pharmacist. Nestlé’s first product was a baby food called Farine Lactée Henri Nestlé, which was designed to help infants who were unable to breastfeed. The company quickly grew and expanded its product line, and by the early 20th century, Nestlé was one of the largest food companies in the world.

Nestlé continued to grow and expand throughout the 20th century. The company acquired a number of other food and drink companies, and it also expanded into new markets. In the 1980s, Nestlé began to focus on developing healthier and more nutritious products. The company also began to invest in sustainable agriculture and water management practices.

Today, Nestlé is a leading provider of food and drink products around the world. The company’s products are sold in over 190 countries , and Nestlé employs over 339,000 people . Nestlé is committed to providing its customers with high-quality, nutritious products that are affordable and accessible. The company is also committed to sustainable business practices that protect the environment and promote social responsibility.

Here are some of Nestlé’s most popular brands:

• San Pellegrino
• Häagen-Dazs
• Lean Cuisine

Nestlé is a global leader in the food and drink industry. The company is committed to providing its customers with high-quality, nutritious products that are affordable and accessible. Nestlé is also committed to sustainable business practices that protect the environment and promote social responsibility.

Table of Contents

History of Nestle – Making of a food giant

The story of Nestle begins in Switzerland in the mid-19th century. In 1866, Henri Nestle , a pharmacist, developed a nutritious and easy-to-digest infant food known as Farine Lactée . The product was a lifesaver for mothers who were unable to breastfeed their infants and quickly gained popularity throughout Europe.

Nestle’s infant food was so successful that in 1874, he formed a company with a group of investors to expand production and distribution. The new company, known as Société Farine Lactée Henri Nestlé , was headquartered in Vevey, Switzerland, and began exporting its products to other parts of Europe, as well as to the United States and Asia.

In the years that followed, Nestle continued to innovate and expand its product offerings. In 1905, the company launched Nescafe, an instant coffee that quickly became a global sensation. Over the next few decades, Nestle expanded into new product categories, including chocolate, dairy products, and pet food, and established a presence in markets around the world.

During World War II, Nestle faced significant challenges as the global conflict disrupted supply chains and created food shortages. Nevertheless, the company persevered and continued to innovate, launching new products such as Nesquik, a chocolate powder for making milkshakes, in 1948.

In the post-war years, Nestle continued to expand its global presence through a series of acquisitions and partnerships. In 1974, the company merged with the Swiss-based food company, Alimentana, to become Nestle Alimentana SA . The merger brought together two of Switzerland’s largest food companies and helped to solidify Nestle’s position as a global leader in the food and beverage industry.

Today, Nestle is one of the largest and most recognizable consumer goods companies in the world, with a presence in nearly every country on the planet. Despite its size and scale, the company remains committed to the principles of quality, sustainability, and social responsibility that have guided its success for over 150 years.

Brand Portfolio of Nestle – something for everyone

Nestle is a global food and beverage company with over 2,000 brands in its portfolio. Here are some of the most well-known brands:

• Nescafé:  Nescafé is the world’s largest coffee brand, with over 200 different varieties of coffee sold in over 180 countries. Nescafé was created in 1938 by Nestlé in Switzerland. The name is a portmanteau of the words “Nestlé” and “café”. Nescafé is available in a variety of forms, including instant coffee, ground coffee, and coffee pods.
• Nespresso:  Nespresso is a premium coffee brand that sells single-serve coffee capsules. Nespresso was created in 1986 by Nestlé in Switzerland. The name is a combination of the words “espresso” and “capsule”. Nespresso coffee capsules are made from high-quality coffee beans and are compatible with Nespresso coffee machines.
• Maggi:  Maggi is a global brand of seasonings, soups, and noodles. Maggi was created in 1872 by Julius Maggi in Switzerland. The name is derived from the German word “Mager”, which means “lean”. Maggi products are sold in over 100 countries and are known for their high quality and affordable prices.
• Kit Kat:  Kit Kat is a popular chocolate bar that is sold in over 100 countries. Kit Kat was created in 1935 by Rowntree’s of York, England. The name is a combination of the words “Kit” and “Kat”, which were the names of two popular cats in the United Kingdom at the time. Kit Kat bars are made with milk chocolate and wafers and are available in a variety of flavors, including original, dark chocolate, and mint.
• Nesquick:  Nesquick is a chocolate powder that is used to make milk shakes and other drinks. Nesquick was created in 1948 by Nestlé in Switzerland. The name is a combination of the words “Nestlé” and “quick”, as Nesquick is a quick and easy way to make a delicious chocolate drink. Nesquick is available in a variety of flavors, including original, strawberry, and chocolate hazelnut.
• Gerber:  Gerber is a brand of baby food that is sold in over 80 countries. Gerber was created in 1928 by Daniel Gerber in Fremont, Michigan, United States. The name is derived from the name of Daniel Gerber’s wife, Dorothy Gerber. Gerber baby food is known for its high quality and nutritious ingredients.
• Purina:  Purina is a brand of pet food that is sold in over 50 countries. Purina was created in 1902 by William H. Danforth in St. Louis, Missouri, United States. The name is derived from the Latin word “purus”, which means “pure”. Purina pet food is known for its high quality and nutritious ingredients.
• San Pellegrino:  San Pellegrino is a brand of sparkling water that is sold in over 150 countries. San Pellegrino was created in 1899 in San Pellegrino Terme, Italy. The name is derived from the name of the town where it is produced. San Pellegrino sparkling water is known for its high quality and refreshing taste.
• Häagen-Dazs:  Häagen-Dazs is a brand of ice cream that is sold in over 50 countries. Häagen-Dazs was created in 1961 in New York City, United States. The name is a made-up name that is intended to sound Scandinavian. Häagen-Dazs ice cream is known for its high quality and rich flavor.
• DiGiorno:  DiGiorno is a brand of frozen pizza that is sold in over 30 countries. DiGiorno was created in 1995 by Nestlé in the United States. The name is a combination of the words “Dig” and “Giorno”, which means “day” in Italian. DiGiorno frozen pizza is known for its high quality and authentic taste.
• Lean Cuisine:  Lean Cuisine is a brand of frozen meals that is sold in over 20 countries. Lean Cuisine was created in 1981 by Stouffer’s in the United States. The name is a combination of the words “lean” and “cuisine”. Lean Cuisine frozen meals are known for their low calorie and fat content and their convenient packaging.

These are just a few of Nestlé’s many brands. The company has a wide range of products that are sold in over 190 countries. Nestlé is committed to providing its customers with high-quality, nutritious products that are affordable and accessible. The company is also committed to sustainable business practices that protect the environment and promote social responsibility.

Strategy of Nestle in different markets around the world

Nestle is a global food and beverage company that operates in over 190 countries around the world. Its presence in each market varies depending on factors such as consumer preferences, cultural norms, and regulatory environments . However, Nestle’s strategy in each market is to adapt to local tastes and customs, while also leveraging its global scale and resources.

One way that Nestle adapts to local markets is by developing products that are tailored to local tastes and preferences. For example, in India, Nestle offers a range of products that cater to local culinary traditions, such as Maggi noodles that are flavored with spices and herbs popular in Indian cuisine. Similarly, in China, Nestle offers a range of products that incorporate traditional Chinese ingredients and flavors, such as congee and tea-flavored milk drinks .

Nestle also adapts to local markets by developing marketing campaigns that resonate with local consumers. For example, in Brazil, Nestle has a longstanding partnership with the country’s national soccer team, and has sponsored a number of initiatives aimed at promoting healthy lifestyles among Brazilian children. In Japan, Nestle has launched a number of marketing campaigns that appeal to the country’s obsession with cute and whimsical characters, such as its “KitKat Chocolatory” stores that offer limited edition flavors and packaging .

In addition to adapting its products and marketing to local markets, Nestle also works closely with local suppliers and distributors to ensure that its products are available and affordable in each market. This includes partnering with local farmers to source raw materials, as well as investing in local manufacturing and distribution infrastructure.

However, Nestle’s efforts to adapt to local markets have not always been successful. In some cases, the company has faced backlash from consumers and regulators who feel that its products are not in line with local tastes and customs. For example, in India, Nestle faced a major controversy in 2015 when its popular Maggi noodles were found to contain excess levels of lead and MSG, leading to a nationwide ban on the product. The incident highlighted the challenges of adapting to local markets while also maintaining quality and safety standards.

Despite these challenges, Nestle’s global presence and commitment to adapting to local markets have enabled it to maintain a leading position in the global food and beverage industry. By leveraging its scale and resources, while also working closely with local partners, Nestle is well-positioned to continue growing and innovating in markets around the world.

Financial Growth of Nestle

A brief overview of Nestlé’s financial growth over the years:

Revenue:  Nestlé’s revenue has grown steadily over the years, from CHF 59.2 billion in 2010 to CHF 92.4 billion in 2022 .

Profit:  Nestlé’s profit has also grown steadily over the years, from CHF 9.4 billion in 2010 to CHF 15.4 billion in 2022.

Earnings per share:  Nestlé’s earnings per share have also grown steadily over the years, from CHF 2.00 in 2010 to CHF 3.00 in 2022.

Dividends:  Nestlé has paid a dividend every year since 1875. The dividend has grown steadily over the years, from CHF 0.10 per share in 2010 to CHF 0.25 per share in 2022.

Nestlé’s financial growth is due to a number of factors, including:

A strong global brand:  Nestlé is one of the most recognized brands in the world. This gives the company a significant advantage in the global marketplace.

A diversified product portfolio:  Nestlé has a wide range of products, which helps to insulate the company from economic downturns in any particular market.

A strong focus on innovation:  Nestlé is constantly investing in new products and technologies, which helps to keep the company ahead of the competition.

A commitment to sustainability:  Nestlé is committed to sustainable business practices, which helps to reduce the company’s environmental impact and improve its long-term profitability.

Nestlé is a well-managed company with a strong track record of financial growth. The company is well-positioned to continue to grow in the years to come.

Marketing Strategies of Nestle

Nestle is one of the world’s largest food and beverage companies and has a range of marketing strategies to promote its many brands and products. Here are some of the key marketing strategies that Nestle employs:

Branding : Nestle’s marketing strategy relies heavily on the strength of its brands. Many of Nestle’s products are household names, such as Nescafe, KitKat, and Gerber, and the company invests heavily in brand recognition through advertising campaigns, sponsorships, and product placements.

Social media : Nestle uses social media platforms to engage with consumers and promote its products. The company has a presence on platforms such as Facebook, Twitter, and Instagram, where it shares product updates, promotions, and other content. Nestle also uses social media to gather feedback from customers and respond to customer inquiries and complaints.

Influencer marketing : Nestle also employs influencer marketing to reach new audiences and promote its products. The company partners with influencers in different markets to create content that showcases its products and engages with consumers.

Digital marketing : Nestle uses a range of digital marketing strategies, including search engine optimization (SEO), pay-per-click (PPC) advertising, and email marketing, to reach consumers online. The company also uses data analytics to track consumer behavior and tailor its marketing efforts to specific audiences.

Experiential marketing : Nestle also employs experiential marketing to create memorable experiences for consumers. This includes events such as pop-up stores, tasting events, and interactive displays that allow consumers to try Nestle’s products and learn more about the company.

Sponsorships : Nestle also sponsors a range of events and organizations, such as sports teams and music festivals, to increase brand awareness and promote its products. For example, Nestle has a longstanding partnership with the International Olympic Committee and is a major sponsor of the Olympic Games.

Health and wellness : Nestle also emphasizes health and wellness in its marketing strategy, particularly in markets where consumers are increasingly concerned about the nutritional value of the foods they consume. The company promotes its products as healthy and nutritious, and invests in research and development to create new products that meet consumer demand for healthier options.

Overall, Nestle’s marketing strategy is focused on building brand awareness, engaging with consumers through social media and influencer marketing, and creating memorable experiences that promote its products. The company also adapts its marketing strategy to local markets, tailoring its approach to specific cultural and regulatory environments.

Social Media Strategy of Nestle

Nestlé uses social media to connect with consumers, build relationships, and drive sales. The company has a presence on a variety of social media platforms, including Facebook, Twitter, Instagram, and YouTube.

Nestlé’s social media strategy is focused on the following key areas:

Content creation:  Nestlé creates high-quality content that is relevant to its target audience. The company’s content is informative, engaging, and visually appealing.

Engagement:  Nestlé encourages engagement with its social media followers. The company responds to comments and questions, and it runs contests and promotions.

Listening:  Nestlé listens to what its social media followers are saying. The company uses this feedback to improve its products and services.

Measurement:  Nestlé measures the results of its social media campaigns. The company tracks website traffic, social media engagement, and sales.

Nestlé’s social media strategy is successful because it is focused on creating high-quality content, engaging with followers, and listening to feedback. The company’s social media campaigns have helped it to connect with consumers, build relationships, and drive sales.

Here are some specific examples of how Nestlé uses social media:

• Nestlé uses Facebook to share recipes, tips, and information about its products.  The company also runs contests and promotions on Facebook.
• Nestlé uses Twitter to share news and updates about the company.  The company also responds to customer questions and comments on Twitter.
• Nestlé uses Instagram to share photos and videos of its products.  The company also runs contests and promotions on Instagram.
• Nestlé uses YouTube to share videos about its products and company.  The company also runs contests and promotions on YouTube.

Nestlé’s social media strategy is a key part of the company’s overall marketing strategy. The company uses social media to connect with consumers, build relationships, and drive sales.

Also Read: Exploring the Brand Architecture of HUL

Controversies around Nestle

Nestle, being a global food and beverage company, has faced several controversies over the years. Here are some of the most notable controversies around Nestle:

Infant formula : In the 1970s, Nestle faced criticism over its promotion of infant formula in developing countries. The company was accused of encouraging mothers to use formula instead of breastfeeding, which led to health problems and even death for some infants. Nestle faced a boycott and protests, and eventually changed its marketing practices.

Child labor : Nestle has faced allegations of using child labor in its supply chain. In 2015, the company admitted to finding instances of child labor in its cocoa supply chain in Ivory Coast, and pledged to take steps to eliminate the practice.

Environmental impact : Nestle has also faced criticism over its impact on the environment. In 2018, the company was named one of the top plastic polluters in the world, with its products accounting for a significant amount of plastic waste in the oceans. Nestle has pledged to increase its use of recycled plastic and reduce its plastic packaging.

Water rights : Nestle has also been criticized for its water extraction practices. The company has faced protests and legal challenges in several countries over its use of groundwater for bottled water production. Critics argue that Nestle is depleting local water resources and undermining access to water for local communities.

Palm oil sourcing : Nestle has faced criticism over its sourcing of palm oil, which is associated with deforestation and habitat destruction. The company has pledged to eliminate deforestation from its supply chain and source sustainable palm oil.

Health claims : Nestle has faced criticism over health claims made for some of its products. For example, in 2019, the company was sued over its use of the term “no added sugars” on its Milo chocolate drink in Australia. The lawsuit alleged that the product contained added sugars and was therefore misleading to consumers.

Overall, Nestle has faced criticism over a range of issues, including its marketing practices, supply chain management, environmental impact, and health claims. The company has taken steps to address some of these issues, but continues to face scrutiny from critics and activists.

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[Brand Analysis] Nestlé's Social Media Strategy - Learn from the World's Largest Food Company

Nestlé has a unified social media strategy and a strong brand positioning. Read this case study to discover the brand's marketing approach.

Nestlé has been around for a long time - for so long that it is over 150 years old.

The Swiss multinational conglomerate is probably one of the oldest and most famous brands of our time.

Over the years, Nestlé positioned itself as a brand leader in terms of approaching the digital era. What started as a manufacturer of milk-based products, today owns 10,000 different products across 2,000 different brands .

In today's case study, we'll go over Nestlé's social media strategy and discover how the brand managed to maintain a unique brand image through innovative campaigns and marketing strategies .

And because case studies and podcasts complete each other, we talked with Alexandra Reay , global social media and community manager at Nestlé, to see the marketing strategy behind this brand's success.

Let's get started! 🙌

Nestlé's Social Media Strategy

Get to know the brand identity behind Nestlé

Nestlé's social media channels

Nestlé on Facebook

Nestlé on instagram, nestlé on twitter.

Nestlé's social media campaigns

Nestlé turns a social media backlash into brand innovation

Benchmark Nestlé against its competitors with Socialinsider

1. Get to know the brand identity behind Nestlé

Nestlé is a multinational food and drink processing corporation that is based in Switzerland. It is the biggest food company in the world, measured by revenue.

According to its LinkedIn profile, the company has around 273,000 employees and factories or operations in almost every country in the world.

Its main products include baby food, bottled water, breakfast cereals, coffee, teas, confectionery, dairy products, ice cream, frozen food, pet foods, and snacks. Its most well-known brands are Nespresso, Nescafe, KitKat, Smarty's, Nesquick, Stouffers, Vittel, and Maggi.

As the world's largest food and beverage company, Nestlé's marketing strateg y has always been one step ahead. And they understood that the key behind digital success is creating value for customers.

However, the brand had its ups and downs.

In 2010, Nestlé went through a PR and social media catastrophe that was on everyone's lips at the time.

But they didn't give up. They worked so hard on their social media strategy , that the brand remained a major player in the food and beverage industry.

They managed to do that through a unified marketing strategy and a strong brand positioning. A significant role in this plays the logo and the slogan, which are easily recognizable.

2. Nestlé's social media channels

Nestlé has a solid presence on all social media platforms, but it's most active on Facebook, Instagram, and Twitter. The brand uses social media sites to engage with its consumers and enhance its brand identity.

The food conglomerate created regional social media profiles to connect with its customers globally for its wide range of products.

Nestlé uses social media to drive marketing, innovation, and leadership potential. To do that, the brand creates different content tailored to every platform's specifics, as Alexandra told us during our podcast episode.

According to Unmetric , Nestlé has 95 social media profiles, among which 36 are on Facebook, 21 on Twitter, and six on Instagram.

To better understand Nestlé's social media strategy, I used Socialinsider, a social media analytics , benchmarking, and reporting tool.

With the tool's help, I discovered that Nestlé has over 11 million followers on Facebook, more than 306K on Instagram, and over 276K on Twitter, which sums up to more than 12 million brand followers.

Now that you have a sense of Nestlé's social media presence, let's go even deeper and understand how and what the brand does on every social platform.

With ​​11,624,391 followers, Facebook is by far the biggest social channel of Nestlé. One of the brand's objectives as part of their social media strategy was to improve their social channels, especially Facebook. And they succeeded!  

Nestlé shares posts related to what the brand is currently up to, its ongoing campaigns , and new product releases on this social platform.

The brand also uses this channel to talk about its corporate social responsibility measures.

Using an analytics tool like Socialinsider , you can evaluate a brand's performance on each social media channel.

For instance, you can see the brand's top-performing posts over the past six months in the image below.

Nestlé has 306,741 followers on Instagram and an engagement of 12K. The brand gained 3,011 new followers in the past six months, indicating that this platform's social media strategy pays off.

Like Facebook, Nestlé's Instagram page is designed to announce campaigns , new products, or even competitions.

Having separate social media profiles is very smart because it can help a brand organize its marketing campaigns more effectively and target the right audiences.

Interestingly, even though Nestlé has many more followers on Facebook, the average engagement rate per post on Instagram was 0.169% in the past six months, compared to Facebook, where the average engagement rate per post was zero.

So if you needed another confirmation, there you have it - people tend to engage more with a brand on Instagram than on Facebook.

On Twitter, Nestlé has 276,807 followers and a pretty good overall performance.

Nestlé gained 2,456 new followers in the past six months and has an average engagement rate per tweet of 0.009%, according to Socialinsider's Twitter analytics tool .

Even though its Twitter profile doesn't differ much in terms of content compared to Facebook or Instagram, it's worth mentioning that Nestlé seems to maintain Twitter as a medium of communication between the company and its audience.

3. Nestlé's social media campaigns

Who doesn't love great social media campaigns?

Nestlé certainly does, as it managed to design clever campaigns to get closer to people and ultimately achieve essential business goals over the past years.

Social media campaigns represent the perfect funnel to connect and collaborate with your community. These are meant to have strong concepts with meaningful messages that can strengthen the brand's identity.

One of Nestlé's social media campaigns that has left a lasting impression on its audience is the one called "Generation Regeneration."  

According to Nestlé , this campaign is built around the environmental threats of climate change. As a big corporation, the brand is committed to the cause, declaring to take actions in regeneration and thus helping the environment.

With 48 posts on Facebook, Instagram, and Twitter in the past six months for this campaign, Nestlé advocates for the benefits of having a plant-based diet or at least a flexitarian one.

This marketing campaign was the most successful on Instagram, with an engagement rate of 0.145%.

Another fun and creative social media campaign of Nestlé is called "Healthier Kids" and is designed with a simple concept: ensuring healthy eating habits from a young age.

And last but not least, Nestlé's "Empowering Women" social media campaign is pretty self-explanatory. Its message is to enhance gender balance in the workforce and to empower women through gender-neutral internal policies that defy stereotypes.

4. Nestlé turns a social media backlash into brand innovation

In 2010, Nestlé went through a social media crisis when Greenpeace linked the food manufacturer with mass deforestation, criticizing its methods for acquiring palm oil.

This issue generated a massive buzz on social media. An analysis made on Twitter showed over 215,000 tweets on the topic only from 13th March to 22nd March 2010.

Nestlé not only became a trending topic on Twitter and basically every social platform, but it gained so much attention that it soon was picked up by traditional media, causing significant damage to the brand image.

So how did Nestlé handle this social media backlash?

The brand first suspended its sourcing from Sinar Mas, which was the first step to gaining its consumers' trust.

In terms of marketing strategy , Nestlé hired a new global head of digital and social media, who created the "digital acceleration team."

The DAT monitors social media sentiment 24 hours a day, communicating any issues observed in the social media sphere.

More than 10 years later, Nestlé tries to maintain the same marketing and communication strategy through its various sustainability campaigns.

Not only that, but they believe that the key to having a good relationship with your consumers is communication and honesty.

As Alexandra told us during one of our podcast episodes, she believes that the worst thing you can do as a social media manager when the brand receives negative comments is to stay silent.

Find out more about Alexandra's insights regarding Nestlé's marketing strategy in Insider Insights' podcast episode:

5. Benchmark Nestlé against its competitors with Socialinsider

After all is set and done, the real success behind a long-lasting social media strategy is dictated by data.

Apart from its solo social media performance, to see where a brand stands in today's crowded digital space, you must benchmark its performance against its competitors as well.

And to bring data to the game, I used Socialinsider, an analytics, benchmarking, and reporting tool .

In this case, I added Nestlé's biggest competitors (Mondelez, Unilever, Danone, Mars, and Heinz) in Socialinsider's benchmark tool and got in-depth insights regarding the brand's performance.

The profiles analyzed were the brands' Facebook, Instagram, and Twitter profiles in the past six months.

For example, on Facebook, Nestlé has the most followers and the highest fan evolution, but Mondelez had the highest average engagement rate per post in the past six months, which is 0.332%.

This indicates that even though Nestlé attracts new followers each month, they don't engage that much with its content despite posting 111 Facebook posts in the analyzed time range.

On Instagram, Mondelez posted the most content, on average, in the past six months, but Unilever was the one with the highest average engagement per day, followed closely by Nestlé with an average engagement rate per day of 367.43.

What's cool about Socialinsider is that you can compare any Facebook, Instagram, or Twitter page with an industry of your choice.

In the example below, I compared Nestlé's Twitter page within the FMCG food industry with Twitter profiles worldwide that have between 100K - 500K followers.

According to our database, the engagement rate per profile, on average, in the FMCG food industry for profiles with 100K - 500K followers is 39.164%, which is 19.6 times higher than Nestlé's engagement rate per profile.

Since the brand only posted 213 tweets in the past six months and the average number of tweets for this industry is 696.7, Nestlé could improve their Twitter performance by posting more.

Final thoughts

Nestlé's social media campaigns have always been short and sweet. They rely heavily on organic content, knowing how to promote inventive ideas and place content to the most appropriate viewers.

But a successful social media strategy isn't all about that.

It's also essential to engage in honest conversations, solve issues, and use social media to listen and inspire your consumers.

Hopefully, this case study gave you a glimpse of Nestlé's social media strategy's different facets. And don't forget that these tactics can be applied to every marketing strategy in any industry.

Content Manager @ Socialinsider

Content & SEO Manager @ Socialinsider with 8 years of experience in marketing. I like to describe myself as a social butterfly with a curious mind, passionate about dancing and psychology.

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End-To-End Case Study on the Business Model of Nestle | IIDE

By Aditya Shastri

Nestle India Ltd has a strong presence in milk and nutrition, drink, prepared plants, cooking aids, and chocolate, and is one of the leading players in the FMCG segment. In the food industry, the company is involved. Nestle India manufactures branded products, including Nescafe, Maggi, Milkybar, Kit Kat, Bar-one, Milkmaid, and Nestea.

This blog discusses the business model of Nestle, its revenue model, value proposition, target market, and other characteristics. We’re quite sure that you have a different view of Nestle as a firm by the end of this insightful blog. You can also read our other blog about the Marketing Mix and Marketing Strategy of Nestle.

 Let us begin the case study by learning more about Nestle.

About Nestle

Nestlé is a conglomerate company based in Vevey, Vaud. Nestlé S.A., a Swiss global food and drink processing company. Since 2014, it has become the world’s largest food company with revenue and other measures. In the edition of the 2016 Forbes Global 2000 list of the largest public corporations, it was placed no 64 on the Fortune Global 500 in 2017 and no 33. Products of Nestle are baby food, food for medical use, frozen food, pet foods, pet foods and snacks, coffee or tea, clothing, dairy products. 29 Nestlé brands, including Nespresso, Nescafé, Kit Kat, Smarties, Nesquik, and others, have over CHF 1 billion (approximately US$1.1 billion) in their annual revenues. Twenty-nine Nestlé brands, including Nespresso, Nescafé, Kit Kat, Smarties, Nesquik, Stouffer, and Vittel generated yearly sales of more than 1 billion CHF (approximately $1.1 billion).

Nestlé has 447 plants in 189 countries and has about 447 employees, 339,000 people. It is among L’Oreal’s primary stockholders, the largest cosmetic corporation in the world. The company is focusing its efforts consistently on better understanding India’s changing way of life, anticipating the requirement of consumers to supply their product offerings to taste, nutrition, health, and health. Nestle offers a comprehensive range of high-quality, secure food items at competitive costs for large consumers.

Business Model of Nestle

Nestle has managed to find a comfortable position in every family with its business approach of value building and its rock-solid marketing mix. Naturally, since its inception, it has come a long way. And this makes FMCG the world’s number one brand. Nestle has seven vertical businesses with health, nutrition, and health goods. The stars in the BCG Matrix include dairy goods, powdered, and liquid drinks, ready dishes and culinary aids, and clothing business sectors. So, here is the business model of Nestle.

1. Channels

• Retail Stores
• Mail Order 
• Media Contacts
• Social Networks
• Club Nespresso
• Nespresso boutiques

2. Key Activities

• Food processing
• Manufacturing
• Quality control
• Production of natural body and aroma components.

3. Key Resources

Our agricultural raw materials are supported, mainly through trade channels, by coffee, cereals, vegetables, fruit, herbs, sugar, and spices. All suppliers around the world have a large variety and must comply with the quality standards of Nestlé. The suppliers with which they operate are audited routinely and raw materials are frequently checked to ensure that they continue to match these criteria.

4. Nestle’s Key Points of Business

• Ensures sustainable organic sale growth, enhanced margins, and consumer-relevant nutrition for all regardless of the degree of income.
• Improvement of operational efficiency to raise the underlying earnings from trade.
• Discipline and clear priorities for allocation of resources and capital.

5. Revenue Model of Nestle

Net profit for the Nestlé Group increased from approximately CHF 7 billion in 2017 to over CHF 12.2 billion in 2020. Nestlé has more than 2000 brands in over 180 nations and is one of the largest food and beverage companies in the world. In Vaud, Switzerland, Nestlé is a worldwide food and drink company. In 2019, Nestlé’s largest market, the Swiss enterprise, accounted for almost 46% of its global turnover in America. In Europe, the Middle East, and North Africa, almost 29 per cent were earned that year. Powdered and liquid beverages, which amounted to 23 billion Swiss francs this year, were the best-selling items of the Nestlé Group based on global trade. in 2019. With a total of just around 15 billion Swiss francs, Nutrition and Health Science came in second, yet in terms of organic growth, it was the highest in the product category that year. The category increased in the measured period by approximately four and a half per cent.

6. Services

Nestle will play a key role in establishing consumer loyalty with the pre-selling and post-sales services. Post-sales services are seen by modern customers as crucial as marketing and promotion. In today’s technologically advanced society, the force of negative e-WOM due to poor support services cannot be undermined. To avoid damaging brand reputations, the company should analyze its support operations and utilize them as a vehicle to promote a favourable word in its mouth because of fast, prompt, and effective services of support.

7. Positioning

The placement procedure is to create the desired picture in the mind of a customer for a business and its items. In terms of customers, Nestle KitKat has a competitive advantage over competitor chocolates. Nestle’s name and emblem alone are a brand that shows customers that attract them to their products. Thanks to the brand name, everybody knows that Nestle has a big quality mark for the client, which makes it easy to convey.

8. Target Market of Nestle

The objective market is the process of developing market coverage plans; which market segments offer Clogard the best opportunities may fundamentally be shown by the group of clients that have the fundamental requirement to buy the item from the organization.

Nestle KitKat is a product that everyone can love. However, when we launch this product, the market targets should also be selected. KitKat’s main target market will be children aged 8-14 because their children like chocolate very much. Youth aged 15-30 are the secondary focus. It is also possible to target both men and women with higher salaries. In urban rather than rural locations, the KitKat can be easily available. In the case of marketing initiatives, mid-size persons with good salaries in particular from urban areas should be targeted.

9. Value Proposition

The objective of Nestle is to improve the quality of life and contribute to healthy living and a healthier future. To improve the livelihoods of 30 million communities directly related to their operation. 

• Nescafe: soluble coffee
• Nespresso: premium restaurant coffee and home education and growth of lifespan.
• Dolce Gusto: different beverage machines and capsules

Nestle is the world’s biggest food producer and market leader in coffee and mineral water, featuring products including milk-based food and culinary aids, cereal, immediate coffee, and food for babies. In addition, Nestle is an organic design model. It is versatile and highly adaptive to the external competitive environment as well as decentralized decision-making authorities. Although Nestle Company has fulfilled its goals. Besides, we know that some theories, such as the law of demand, maybe applicable in our reality when the cost of the product reduces. The demand for the quality of the product will also rise, vice versa. We know the theories of micro and macroeconomics. In reality, the buyer wants to buy the product that has the lowest price instead of the highest.

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• Harvard Business School →
• Faculty & Research →
• November 2008 (Revised October 2012)
• HBS Case Collection
• Format: Print
• | Language: English
• | Pages: 37

About The Author

David E. Bell

Related work.

• Faculty Research
• June 2009 (Revised October 2012)

Nestle (TN)

• Nestle  By: David E. Bell and Mary Louise Shelman
• Nestle (TN)  By: David E. Bell and Mary Louise Shelman

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.

→ How did Nestle manage to make that much money?

Table of Contents

Nestle case study

Products offered by nestle.

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

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

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

Competitors of Nestle: A Case Study

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

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.

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

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.

→Working Professionals

Who doesn’t want to feel fresh?

→General Audiences

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

Nestle’s strategies for Digital Marketing

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

Nestle: Partner with influential celebrities

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

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.

Nestle: Product localization

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

Nestle: Co-branding

Do you know anything about Android KitKat?

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

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.

Nestle: Content Marketing 

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

Nestle: Out-of-Home Advertising

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

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

Nestle: Run marketing strategies that encourage connections and unite customers

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.

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

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

Nestle’s Social Media Marketing Strategy

Nestle’s social media presence.

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.

Nestle’s Instagram

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’s YouTube

Nestle’s pricing strategy.

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

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.

1- Price Skimming: Nestle

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

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.

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.

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.

4- Psychological pricing strategy: Nestle

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

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

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.

Global pricing strategies of Nestle

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.

Nestle Company’s pricing strategy- Key Insights

✔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.

Upcoming plans of Nestle

Other articles, related posts, difference between competitive advantage and comparative advantage, types of competitive advantage | why it is important, marketing mix of walmart | marketing 7p’s, 11 price skimming examples, 16 examples of penetration pricing, advantages and disadvantages of price skimming: when to use price skimming, advantages and disadvantages of penetration pricing strategy | examples, apple: integrated marketing communication (imc), how to create a digital marketing strategy, difference between 4ps and 7ps of marketing.

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Case Study On Nestle’s Digital Marketing Strategies

• May 19, 2022

Table of Contents

Be it in the smell of a hot coffee, in the form of a break, or in delicious noodles in a bowl – we have all enjoyed the wonderfulness of Nestle’s products. Nestle, today, is a brand that everybody knows and uses. They have come a long way, overcoming many hurdles on the way, to smell success and constantly grow. 

We’re curious about the know-how. 

In this blog, we deconstructed the factors through which Nestle has gained success through digital marketing channels. Read on to find out how they distinguish themselves from the competition and shine through the crowd.

First, let’s take a closer look at Nestle’s history and how it started. 

About Nestle 

A subsidiary of NESTLE S.A . of Switzerland. Nestle India is the provider of all our favourite products, namely, Nescafe, Nestea, Maggi, Kit Kat, Munch, Milky Bar , and many more! With over eight factories and many co-packers, you’re sure to find Nestle on the shelves of every store.

Honesty, Integrity, and Fairness are at the core of Nestle’s values, which has notably made them among India’s “Most Respected Companies” and the “Top Wealth Creators of India.”

With more than 2000 brands and production in 191 countries, Nestle’s umbrella keeps widening by the day. They’re not just the world’s largest food and beverage company; they’re also one of the best companies to seamlessly collaborate with the digital world and be successful in it. 

Why should marketers study Nestle’s digital marketing strategies?

Nestle’s marketing strategies can teach you how to create and build marketing strategies that work and get a huge response from consumers. Here are four things one can learn from Nestle’s digital marketing strategies: 

1. Collaborate with influential celebrities

Nescafe collaborates with celebrities to put forward their word and create more buzz around their brand. They announced Bollywood actress Disha Patani as their brand ambassador a few years ago. 

They recently also launched a campaign with popular content creators called “Karne se hee hona hai” (Only doing will make it possible). They introduced this campaign amidst the pandemic to motivate people and urge them to keep working hard toward their dream despite the circumstances. Through this campaign, they encourage the youth to dream, act, and achieve. 

2. Implement campaigns that foster connections and bring people together 

Arnaud, an ordinary 37-year-old with 1,200 Facebook connections, was challenged by the company to meet and catch up with his pals over a cup of coffee. He filmed these encounters and turned them into a 42-minute web video documentary. During these encounters, Arnaud had a cup of Nescafé with his friends.

On social media, the initiative was an instant hit. On Facebook, it had almost 8 million views, 63,050 Likes, 5,550 shares , and 4,850 comments . In addition, the Nescafé Facebook Page saw a 400% rise in fans.

Fans of the video were enthralled by the documentary and wanted to learn how to turn their online friendships into real-life relationships. As a response, it established the ‘le Défi Nescaf é’ Facebook campaign to give winners the chance to recreate the same experience. Over 26,000 people applied, 19,000 people liked it, and 1,725 people shared it.

Nescafe became an internet sensation by marketing itself as a product that stimulates friendships and connections.

3. Engage in a variety of social media platforms

Nescafe has a sizable online following. It has more than 30 million Facebook fans. Twitter, Facebook, Snapchat, and Periscope are among the sites where the business has grown. The brand produces a unique combination of graphics, interactive GIFs, and user-generated movies. Snapchat has launched over 40 campaigns.

Hence, by engaging in this variety of platforms, they can connect to the audience everywhere. 

4. Be trendy to attract attention

To launch its “Good Morning World” campaign, Nescafe capitalized on the 360-degree video craze and the “Cup Song” movement. The Cup Song was an online trend in which millennials sang while using cups as musical instruments.

Nescafe’s take on the “Cup Song ” featured a diverse mix of people who began their day with a cup of Nescafe. These people sang Madcon’s “Don’t Worry” using cups as an instrument. In this way, they used trends to make their advertisements more popular and loved by the mass audience. 

Nestle’s digital marketing strategies 

1. nestle’s social media marketing strategies.

Nestlé has a strong social media presence across the board, but it is particularly active on Facebook, Instagram, and Twitter. The company uses social media sites to interact with customers and strengthen its brand image. The food company launched regional social media pages to engage with its global clientele for its wide range of products.

Nestlé uses social media to boost its marketing, innovation, and leadership capabilities. Nestlé has 95 social media profiles, with 36 on Facebook, 21 on Twitter, and six on Instagram . The brand generates various pieces of content customised to the nuances of each platform.

Nestle’s Instagram marketing strategies

Nestle India’s Instagram page ( @nestle.instagram ) has 42.7K followers and has increased its follower base constantly over the past year. Nestle posts many different types of content, like CSR posts, new launches, engagement-related posts, and off late about their internship opportunities. Hence, it is safe to say that their strategies have been working for them. 

Internship-related posts

However, one obvious and noticeable factor on Nestle’s Instagram page is their comments. Their comments are often unanswered and filled with backlash and complaints.

As a digital marketer, you must reply to at least two comments per post and solve your followers’ queries. 

What is Nestle’s Instagram engagement rate?

Nestle’s Instagram engagement rate is 1.02% , with an average of 409 likes and 47 comments per post. 

Nestle’s Facebook marketing strategies

Nestle India’s Facebook page ( @nestle.instagram ) has 11,629,660 followers and has increased its follower base constantly over the past year. Nestle posts many different types of content, like CSR posts, new launches, engagement-related posts, and lately, about their internship opportunities. Hence, it is safe to say that their strategies have been working for them. 

Their posts are generally the same as the ones on Instagram, like this CSR post that’s published on both platforms:

Nestle’s Twitter marketing strategies

According to Socialinsider, Nestlé has 26.7k Twitter followers and excellent overall performance. Nestlé has attracted 2,456 new followers in the last six months, with a 0.009 per cent average interaction rate per tweet. Even though its Twitter profile isn’t very different from its Facebook or Instagram profiles in terms of content, it’s worth noting that Nestlé appears to use Twitter as a means of connection with its audience.

2. Nestle’s SEO strategies 

Website overview.

Nestle acknowledges the importance of having a strong web presence and curates strategies to strengthen its visibility on search engines. With so many brands under Nestle, they have a separate website for each brand. Since the website for each brand is customised to the respective niche, it leads to a better ranking.

Most brands constantly create campaigns through which they can spread awareness on social media and increase brand visibility. Nestle, however, aims at driving traffic from all sources to its website.  

According to UberSuggest, Nestle’s domain authority is at 50, rated as ‘Great.’ This is a testament to their strategies and how they position themselves through their website. 

With over 29,005 organic keywords, Nestle’s website is very well optimised and drives 2,05,443 monthly traffic. These are their top organic keywords in India that cause the most traffic on their website.

2,90,430 is an amazing estimate for backlinks. This is much higher than their competitors and other FMCG brands in India. Hence, they are way ahead in their SEO game and only keep getting better. 

Nestle’s Top Digital Marketing Campaigns:

1. #wemissyoutoo-maggi campaign .

Maggi had a huge hit after it was banned because it had high monosodium glutamate (MSG) levels and lead content – more than what was permitted. To hope for a comeback would have been impossible, but Maggi did so and did it in a way that gave them back promising sales. The volume and value of the product now are even greater than before the ban. 

They did so through marketing campaigns, one of which was called #WeMissYouToo. They released a set of videos portraying how much people miss Maggi and how their lives were better with Maggi. Here are some of the videos that were included in the campaign:

It establishes how Maggi has been a staple meal for many people and how its absence has affected their lives. In each of these campaigns, the protagonists address Maggi as “yaar” or “a friend” who is there for them and eases their life. Hence, they stated Maggi’s return to be a celebration which meant bringing back people’s lives to normalcy.

By ending each of these ads by saying #WeMissYouToo, Maggi was able to connect to people and give them hopes of their comeback. 

2. Celebrate the breakers – A campaign by KitKat

Around the world, 12 billion KitKat fingers are consumed each year. KitKat is one of Nestlé’s most popular chocolate products in India, and the company just released KitKat Senses, a premium “slow-churned” chocolate.

Nestlé sought to leverage Instagram to promote its ‘Celebrate the Breakers’ campaign by increasing awareness and message association (via website clicks and video views) among passionate 15 to 34-year-old Instagram users.

Nestlé has developed a new global advertising campaign that takes a different approach to the well-known slogan “Enjoy a break, have a KitKat.” “Celebrate the Breakers” was a new concept that recognised the many various forms of breaks that ‘breakers’ take. The concept was beautifully conveyed through animated films in which KitKat’s fingers were used to bring each break to life.

Instagram was the appropriate venue for Nestlé in India to tell this narrative graphically. The firm posted a series of photo ads with the hashtag #mybreak over seven weeks , showcasing people enjoying various types of breaks, such as sleeping at their work, listening to music, and partying all night. KitKat’s images resonated effectively with its audience because Instagram is already a place where people go to share their daily experiences and moments.

3. Good morning world – The Nescafe campaign 

In social media, 360-degree films were all the rage. Millennials enjoy watching 360-degree video vlogs because they get a comprehensive picture of everything going on around the vlogger.

To launch its “Good Morning World” campaign, Nescafe capitalized on the 360-degree video craze and the “Cup Song” movement. The Cup Song, for the uninformed, was an online trend in which millennials sang while utilising cups (even speed stacks!) as musical instruments.

Nescafe’s take on the “Cup Song” featured a diverse mix of people who began their day with a cup of Nescafe. These people sang Madcon’s “Don’t Worry” using cups as an instrument.

Conclusion 

As you can see, Nestle has made inroads into the digital sphere to sell its products and brand. Do you want to create your own killer strategies? You can enrol in Digital Scholar’s online digital marketing course to improve your company’s digital marketing strategies. This course is for anyone interested in learning everything there is to know about digital marketing and how to apply it to their own company. To discover more about them, visit www.digitalscholar.in .

Are you ready to elevate the image of your organisation to new heights? Start by taking our free digital marketing course and start upscaling your business.

Which campaign by Nestle is your favourite? Let us know what you think in the comments area below.

Written By Digital Scholar

Digital Scholar is a premier agency-styled digital marketing institute in India. Which offers an online digital marketing course and a free digital marketing course worldwide to elevate their digital skills and become industry experts. Digital Scholar is headed by Sorav Jain and co-founder Rishi Jain, who are pioneers in the field of digital marketing. Digital Scholar’s blogs touch upon numerous aspects of digital marketing and help you get intensive ideas of different domains of digital marketing.

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- Katharine Paine

In 2019, Nestle earned half of its worldwide sales in America. It had a cumulative revenue of about 92.6 billion Swiss Francs that year. How was Nestle able to generate that much revenue ? What is their pricing strategy? Let’s find out!

Case Study on Nestle

Nestle was founded in Switzerland by Heinrich Nestle in 1866. Nestle is one of the oldest multinational companies. From the early stages, Nestle wanted to take advantage of growth opportunities in different countries. In 1905, it merged with Anglo-Swiss condensed milk, broadening its product range to include infant formulas and condensed milk. Nestle currently has 447 factories, with operations in 189 countries.

In this case study, we will focus on Nestle's pricing strategies. Pricing is the most important element for maximising revenues. According to Harvard studies, if there is a 1% improvement in pricing, it leads to an 11% increase in profits (approx.). If the pricing structure is incorrect, the business loses profit with each transaction made. Therefore, correct pricing is critical.

Nestle is a multinational brand with a present net worth of about $270 billion. The success that the brand has is due to its pricing strategy. The revenue of Nestle is continuously growing, this depicts the successful identification and placement of its products in the market. Generally speaking, Nestle’s products are pricier in comparison to the products of the retailing brand.

Nestle’s pricing strategy is fairly distinctive in contrast with other brands. It merely hinges on recognition which is attributed to the apparent quality of the product. Based on this quality and the attitude of the customers, Nestle assesses the pricing strategy it wants to implement.

Nestle’s pricing strategies

Here are some of the strategies implemented by Nestle in order to achieve its targets and goals.

Nestle Price skimming

Price skimming is a pricing strategy in which a company charges a high price initially and lowers it over time.

Nestle uses price skimming for some of its products when it enters the market of a country.

Nestle believed that the target consumers for Nescafe coffee were upper-middle-class consumers. Later, with the success of this approach and strategy, they lowered the prices and targeted the middle class.

Inexpensive pricing strategy

Amongst its wide range of brands, Nestle offers a fair price for quite a few of its brands and products. Pricing is based on market segmentation . Market segments generally involve a target audience.

Market segmentation is the practice to divide the target market into subgroups. It forms subsets depending on needs, psychographic, behavioral, and demographic criteria.

If Nestle is trying to target the mass market, then they implement an inexpensive pricing strategy instead of an expensive one.

This happened in the case of Nestle's Maggi noodles. It is considered affordable in comparison to other products of Nestle. However, if the price of Maggi is compared globally with other noodle brands, then it can be perceived as a little pricey.

Bundle price strategy

With time Nestle has understood that people do not usually do their groceries every day, instead, they prefer purchasing in bundles. Therefore, Nestle implemented the bundle packs approach.

Initially, Maggi was sold in a single pack but later on, Nestle offered a 16 pack which eventually increased the sales.

Penetration pricing strategy

Penetration pricing is a pricing strategy that an organisation uses to offer new products at lower prices in an attempt to attract more customers away from rivals.

When Nestle introduced a new flavor of Maggi instant noodles, they were sold at a low price of £2.25 to entice new customers. Nestle’s strategy was to lure more customers away from its rivals which offered alike flavors priced at £3.25. Nonetheless, when Nestle gained a greater customer base they increased the price to £3.

Psychological pricing strategy

Psychological pricing facilitates in creating a positive psychological influence on the consumer and attracts them to buy the product.

Nestle Aero bliss was sold for £8.99 instead of £9. This pricing strategy will have a positive psychological impact on the consumer and will encourage them to purchase the product.

Stock keeping units

Nestle does not want to lose any customers, so it has diverse pricing for every stock-keeping unit, allowing it to reach a bigger consumer base. From Maggi noodles to Cereals, Nestle has it all covered, whereby the company offers different sizes of packs.

Nestle’s cereal is slightly pricey in comparison to other brands. Hence, it started offering mini pouches for everyday consumption. This has made the pouches a lot cheaper than larger packs, hence allowing different segments of customers to buy Nestle’s products.

Discounts offered

Nestle offers discounts in various retail stores. Nestle products are often bundled and come with a 5% or 10% discount.

Coffee and creamer, as a bundle, is cheaper than buying the two items separately.

Competitive pricing strategy

Another general approach that Nestle follows is analyzing the pricing strategies of its rivals. Nestle has several brands and for every brand, it has separate departments that assess the pricing strategies of its rivals. Besides that, it examines the marketing style, sales, and innovation of rivals. The competitive pricing strategy assists in achieving Nestle's desired position as they acknowledge the preferences of the consumers.

Global pricing strategies of Nestle

Globally, Nestle attempts to ensure the pricing strategies that will assist it in achieving its financial objectives . These strategies typically involve the penetration and skimming strategy. The price of Nestle products automatically rises when they are exported to other regions. Alternatively, it also implements price skimming, as it sets a higher price at the start and then ultimately reduces the price based on the customer demand.

Over the years, Nestle has become one of the leading parent brands with successful divisions under its name. What has made Nestle successful with consumers is that it adapts to different pricing strategies according to the regions its selling and according to the product offered. It gives preference to the demands of its customers and tries to provide the best quality products at different price ranges so that all segments of consumers are able to afford its products, hence, increasing the sales and profits for the company.

Pricing Strategy of Nestle Company - Key takeaways

Nestle was founded in Switzerland by Heinrich Nestle in 1866.

Heinrich originally created Nestle for distributing milk food for newborns and found that it could be created from powdered milk, sugar, and other natural food.

Nestle is a multinational brand with a present net worth of about $270 billion. The success that the brand has is due to its pricing strategy.

Nestle’s pricing strategy is fairly distinctive in contrast with other brands.

Nestle uses various pricing strategies including price skimming, inexpensive and bundles pricing strategy, penetration pricing strategy, stock keeping units, psychological pricing strategy, discounts, and competitive pricing strategy.

Howandwhat, https://howandwhat.net/marketing-mix-nestle/

The Strategy Watch, https://www.thestrategywatch.com/pricing-strategy-nestle/

Price intelligently, https://www.priceintelligently.com/blog/bid/182007/6-must-read-pricing-strategy-quotes

StuDocu, https://www.studocu.com/my/document/tunku-abdul-rahman-university-college/pricing strategy/bbdt3193-pricing-strategy-for-the-company-nestle/18242524

Studymode, https://www.studymode.com/essays/Nestle-Pricing-Strategy-1058790.html

Iide, https://iide.co/case-studies/nestle-marketing-strategy/

Iide, https://iide.co/case-studies/marketing-mix-of-nestle/

Flashcards in Pricing Strategy of Nestle Company 15

Who founded Nestle?

Heinrich Nestle

When was Nestle founded?

How did Nestle start?

Heinrich created Nestle for distributing milk food for newborns and found that it could be created from powdered milk, sugar, and baked food.

With which company did Nestle merge?

In 1905, it merged with Anglo-Swiss condensed milk, hence making the product range broader with infant formulas and condensed milk.

What is price skimming?

How did Nestle implement price skimming?

Nestle’s brand ‘Nescafe’ was depicted as a product of target segment of the upper-class. Later, with the success of this approach and strategy, they lowered the prices and targeted the upper-middle class.

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Frequently Asked Questions about Pricing Strategy of Nestle Company

What are the strategies of Nestle company?

What are the 5 pricing strategies?

Five major pricing strategies including price skimming, inexpensive and bundles pricing strategy, penetration pricing strategy, psychological pricing strategy, and discounts.

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07 December 2021 12:28:14 IST

Nestlé powers on with a rural revamp and innovation

I n March 2021, Suresh Narayanan, Chairman and Managing director of FMCG major Nestlé announced that the company is set to reach more than 1.2 lakh villages, each with over 5,000 people, in rural India by 2024. To cater to the needs of rural consumers, Nestlé is changing its product portfolio by renovating some products. Suresh Narayanan said, “Rural is an important dimension of the next phase for Nestlé.”

Nestlé has always been associated with the urban market, and young city dwellers in India too typically take a liking to its product portfolio in India. After the Maggi fiasco in 2015, Nestlé wanted to reduce its dependence on a few products and widen its reach. Nestlé India Ltd (NIL) launched nearly 35 products within a span of just six months in 2016. At that time, it had a presence in just 6,000 villages across the country.

Fierce competition

Nestlé is a late entrant. Hindustan Unilever Ltd (HUL) was one of the first in India to develop a strong rural distribution network in the 1940s and gain a wide reach. Later, in the 1990s, HUL expanded its distribution network through Project Shakti, which helped women become entrepreneurs by selling HUL goods. The project helped HUL cover almost 50 per cent of all the 6,00,000+ Indian villages.

Other FMCG companies are not far behind — ITC catered to nearly 1,00,000 villages in 2021. P&G is strengthening its network to reach more rural areas. Marico has increased its number of stockists to 6,200, up by 30 per cent. Dabur, with over 6.7 million outlets in both urban and rural areas, attributed 46 per cent of its total sales to rural alone.

Initially, Nestlé’s focus was on tier 1 and tier 2 cities from where it was witnessing high demand. It then expanded its focus to smaller towns with 10,000 to 15,000 people. To improve reach, the company started researching customers’ needs and shopping habits in different geographies. This helped the company to come up with strategies specific to each market and tailor its products accordingly.

Product diversification

Nestlé had always relied on a few flagship products, such as Maggi and Nescafé. Once it started catering to rural markets, it started putting out tailor-made products in different packages. Between 2016 and 2018, Nestlé launched 39 new products. These included Masala Fusion dairy whitener, Greek Yogurt Grekeyo, and Nestlé Everyday Chai in three varieties.

It launched Nestlé a+ Banglar Misthi Dai, and Ceregrow organic cereals, Lactgrow for toddlers, and products in the weight management category like OPTIFAST. Under the Maggi range, it launched new variants of sauces, soups, pasta, and poha . New flavours of Maggi — Yummy Capsica and Chatpata Tomato — were launched along with atta spinach noodles. To cater to growing demand from towns and tier 2 and tier 3 cities, Nestlé launched Maggi fried rice masala, Paneer masala mix, and Nestlé Ceremeal Daliya.

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At the same time, Nestlé also withdrew some products which were not garnering enough sales. These included health drink, Milo, as it had failed to gather enough momentum in spite of its long-lasting presence. Other products that Nestlé decided to remove from the shelves included Nestlé Chocostik, butter, and Nestlé Choo. With the rural push, Nestlé had covered 89,000 villages by 2019.

During the Covid-19 pandemic, growth in the urban areas tanked, but the rural markets showed accelerated growth. In the quarter ending December 2020, while Nestlé’s overall sales grew by 10 per cent, urban sales grew by just 6 per cent. Narayanan was of the view that the main reason for the falling demand from urban markets was the reverse migration that took place in the wake of the lockdown imposed to prevent the spread of the virus.

At the same time, semi-urban and rural India were experiencing growth. For example, Maggi had found several takers in rural markets, pushed by advertisements in local languages and smaller packs priced at ₹5.

As of early 2021, rural areas accounted for 25 per cent of Nestlé’s revenue, and the company announced that it would continue to concentrate on the rural markets due to growing demand. However, Nestlé was still behind the other FMCG companies, which had an average revenue of 35 per cent from the rural areas. In order to reach 120,000 villages, Narayanan looked at introducing customised products, and different packages and distribution channels.

Narayanan was also positive about the demand for packaged products growing further, owing to the bottom of the pyramid shrinking and the estimated 140 million households expected to move into the affluent class by 2030. In the rural areas, Nestlé was in competition with players such as Unilever, ITC, Dabur, and so on, in a highly-penetrated market. These companies offer a wider range of products that enjoy immediate recall among rural consumers. For Nestlé, only Maggi has mass appeal.

To capture the rural markets, it is important for companies to reach customers through direct channels, experts said. Most FMCG companies reached more than 60 per cent of their outlets through direct channels. But Nestlé reached only 1.5 million outlets directly of the total 4.5 million outlets, and much of this reach was in the urban region.

Another issue that Nestlé needed to address was the high price of its products. Except for Maggi, and some varieties of chocolate, the rest of its products were not available at low price points.

India has the world’s largest rural population. According to the 2011 census, rural markets comprise more than 6,40,000 villages with 850 million people. Despite increasing urbanisation, over half of India’s population still lives in the rural areas. Around 15 per cent of the rural population lived in poverty as of 2020. The average size of the rural household is 4.7. The rural FMCG market in India accounts for 40 per cent of the overall FMCG market in India.

The people in villages account for half of the country’s GDP and their consumption patterns are changing gradually. They demand high-quality products, just like their urban counterparts. The consumer goods market in India’s rural areas, which stood at $12 billion in 2019, is expected to rise to $100 billion by 2025.

The rural population is turning tech-savvy and, with the growing penetration of smartphones and the internet, rural consumers are aware and knowledgeable about brands and products. These consumers demand high-quality products that help them live on a par with their urban counterparts. According to Kearney India Retail Index, with the increasing use of mobile phones and availability of the internet, the rural markets have been uplifted.

4As of rural marketing

The 4Ps of marketing are a standard for marketing strategy. But rural marketing needs something different — these are the 4As — acceptability, affordability, availability, and awareness. For any company to be successful in rural India, an adequate mix of the 4As is necessary.

Acceptability

Products designed for urban consumers may not be suitable for rural customers. It is important to ensure acceptability. Rural customers demand products with high utility value and convenience to use. In smaller villages, the demand is for products that help save money and effort. Godrej Consumer Products, for example, created acceptability for their range by showcasing the products at rural haats , melas , and religious gatherings.

Nestlé introduced several products specific to rural India to gain acceptability among customers. These include Maggi Fried rice masalas, paneer masala mix, and Nestlé Ceremeal Daliya.

Affordability

When the income of average Indians is considered, people in the rural areas earn less than half their urban counterparts do. In 2019, the government’s estimates of per capita income in terms of Net Value showed that urban per capita income was ₹98,435, whereas in the rural areas it was ₹40,925.

It is the foremost requirement that all products and services designed for rural areas are affordable. At the same time, the rural population needs products of high quality, so it is necessary to design products that are value-adding for rural consumers. They prefer smaller packs as they are more affordable.

This has led to the proliferation of sachet packaging in India. Coca-Cola introduced 200 ml PET bottles priced at ₹5 to push the beverage into the market. Nestlé too has been bringing in some products like Maggi and a few types of chocolate in smaller quantities priced low, to make them affordable.

Availability

India has over six lakh villages, spread out across the country. Over a quarter of these villages are not connected through all-weather roads. It is important for FMCG companies to make their products available in the hinterland if they want to take advantage of the demand there. The last-mile distribution is, however, a challenge in India. FMCG major HUL addressed it through its ‘Project Shakti’. Nestlé is available in nearly 90,000 villages, which still left a lot of villages uncovered.

The company could consider replicating the highly popular até Você door-to-door micro-distribution system that it has successfully used in Brazil. In this system, distributors and resellers from the local community sell Nestlé products in their neighbourhoods. Though Nestlé used this system in the urban markets of Brazil, a similar programme can be envisaged to reach the rural population in India.

While literacy levels are lower in rural areas than in urban areas, growing internet adoption has made it easy to reach people and create awareness. At the same time, marketers may find it difficult to cater to the rural population as most of the advertisements in the country are urban-centric. The fact that languages and dialects change every few miles makes it important for FMCG companies like Nestlé to come up with specific programmes for the rural population.

One unique awareness-building programme started by HUL to reach consumers in the rural hinterland was a free mobile radio service called ‘Kan Khajura Tesan’. This mobile-based, on-demand entertainment initiative was launched in Bihar. Through this service, customers could listen to songs, dialogues from popular movies, jokes and poetry in Hindi and Bhojpuri by calling a particular number. These programmes were interlaced with advertisements for HUL products.

(Faria Zafar is Associate Consultant, and Indu Perepu is Research Faculty, at IBS Case Research Center, Hyderabad.)

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Nestlé’s CMO shares her strategy for accelerating digital transformation at scale

Digital transformation is a journey, not a destination. While every journey will be different, we can learn from leading brands as they advance their digital maturity. Here, Nestlé’s Global CMO, Aude Gandon, takes us through the company’s approach to global digital marketing.

Staying relevant in today’s dynamic environment requires embracing constant change. And as Nestlé’s global chief marketing officer, my mission is to accelerate our marketing digital transformation across the entire organisation.

As a 156-year-old company with more than 2,000 brands — including icons like Kit Kat, Nespresso, and Purina — we believe that data and technology, along with our organisation’s ability to adopt and activate quickly, are key to maintaining a competitive advantage.

Part of Nestlé’s success lies in how we’re able to attribute our digital investments to our top and bottom lines. We recently updated our investors on our digital transformation journey by explaining how we’re using data to reach and resonate with consumers at scale, and how that powers growth across our portfolio.

In particular, we’ve identified three key areas that are critical to our success and that we’ll continue to invest in: privacy-preserving fundamentals, valuable consumer connections, and ongoing experimentation. Here’s how we approach each one.

Privacy-preserving fundamentals

The first key to our success is a sharp focus on privacy-preserving fundamentals. A critical part of my role as global CMO is to help Nestlé navigate the changing advertising landscape , especially as third-party data collection phases out. By treating data protection and privacy as paramount, we've accelerated the use of privacy-preserving technologies across our organisation, ensuring that our first-party strategy is future-proof. This means our brands can access high-quality data and continue to deliver personalised experiences online.

To drive our privacy strategy, we’ve developed and delivered a global advertising-technology roadmap across all our markets and brands. Doing so has helped us take advantage of privacy features, like consent mode within Google Analytics 4 (GA4), through which we can communicate users’ cookie- and app-identifier consent status to Google. Tags will then automatically adjust behaviour and respect users’ choices. In turn, we’re able to safely improve our understanding of consumers across platforms and deliver richer experiences online.

Lastly, we recognise that staying up-to-date on new privacy capabilities requires us to invest in upskilling programmes for our talented teams of brand builders around the world. By empowering our marketers to deeply understand the impact and value a technology unlocks, we can accelerate our transformation and put our company on the path to competitive advantage.

Valuable consumer connections

Our second key focus is on building and fostering valuable consumer connections. In particular, our goal is to reach 400 million consumers with our first-party database by 2025. Having direct access to our first-party data — and turning this data into actionable insight — is a critical competitive advantage with immediate value for our brands.

By moving toward a first-party, data-driven approach and leveraging Google’s privacy-preserving advertising and analytics tools, we’ve increased our ability to offer personalised solutions in real time, track ROI, and improve sales performance. This ultimately helps us make smarter investments, especially amid economic uncertainty, when it is more critical than ever to understand the value of media spend.

Our “Cloud-in-a-Box” programme gives our brands scalable blueprints to unlock the value of machine learning and other predictive technology.

One powerful example of this is our food brand Maggi’s use of first-party data to inform dynamic ad creative and better connect with consumers in the Middle East during seasonal moments and other special occasions. By taking this approach, the Maggi team improved its return on ad spend by 25%.

Another example is how we leverage new audience capabilities to derive value from our first-party data. Solutions such as Google’s advanced look-alike modelling, currently available in beta, gives us more transparency and control when building audience segments by combining our first-party data with Google’s consumer intent signals. Already, this technology has improved our media efficiency and helped drive a 25% uplift in ad recall for one of our pet care brands in the U.K.

Ongoing experimentation

Our final key focus is on experimentation and fostering a culture of experimentation across our marketing teams. To do this, we lean heavily on cloud capabilities that give us the flexibility to try new technologies while strengthening consumer privacy and growing our first-party data. Our “Cloud-in-a-Box” programme, for example, gives our brands scalable blueprints to unlock the value of machine learning and other predictive technology.

Here’s what this looks like in practice for our market-leading Nescafé coffee brand in Thailand. Using Cloud-in-a-Box, the Nescafé team routed large volumes of past campaign data to Google Cloud, then used machine learning to predict which creative messages paired with which audiences to deliver the best results on YouTube.

By taking this approach, Nescafé improved its cost per view by 17% and invested the money it saved to reach additional audiences, all while boosting ad recall 12%. Most importantly, the team saw up to 90% accuracy in the model’s predictions, when compared with outcomes from the actual campaign.

Achieving long-term goals

Building brands that consumers love remains our core marketing ambition. Our continued investment in digital transformation focuses us on understanding and using the power of data and technology to fuel growth potential for tomorrow.

By driving a consistent global marketing strategy across the organisation, our team has been able to drive change at scale, embracing data and technology to build competitiveness. Our strategic priorities are helping us build resilience through uncertainty, positioning Nestlé to achieve long-term growth.

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Nestle: Market Saturation And Cannibalization Problem

• Nestle shares have underperformed the S&P 500 for the past decade due to a lack of growth and unsuccessful optimization efforts.
• Nestle's dividend appeal is not enough to justify investing, as a dollar from dividends is not worth more than a dollar from price appreciation.
• Market saturation, cannibalization, and slow efficiency initiatives contribute to Nestle's inability to generate growth, making it a borderline Sell.

4FR/iStock Unreleased via Getty Images

Nestle ( OTCPK:NSRGY , OTCPK:NSRGF ) shares have severely underperformed the S&P 500 for essentially any time period you choose over the last decade, and rightfully so.

Efforts to optimize the portfolio, divest underperforming brands, and improve efficiency, have yet to bear fruit, with Nestle's revenues at the same level they were back in 2018, generating a similar margin.

What's the right price to pay for a solid company that's not growing, and why can't Nestle generate growth? Let's find out.

Introduction & Revisiting The Hold Thesis

I've been covering Nestle on Seeking Alpha since February of 2023. Initially, I rated the stock a Buy, as it stood out to me as one of the few staple companies that were able to generate positive volume growth post-pandemic. In addition, Nestle had a clear plan to improve efficiency, cut lagging brands, and increase capacity in high-demand lines, specifically in pet care.

Time went by, and it became increasingly clear Nestle's positive volumes were primarily a result of delayed price increases. Those delayed price increases resulted in pressured margins, and, when the company finally started raising prices, it started seeing consistent market share declines.

With the realization the growth problem is much more fundamental than temporary, I downgraded Nestle to a Hold.

Taking a step back to look at the bigger picture, we can see the magnitude of Nestle's underperformance over the last decade, returning 78%, compared to the S&P 500's 228%, and the Staples Sector Index ( XLP ) with 124%.

$1 From Dividends Is Similar To A $1 From Price Appreciation

Nestle is a prominent name in the staples sector. The company has been around for almost 160 years, and it operates in a sector that is perceived as defensive and resilient.

In addition, Nestle has been paying a dividend every year since 1959 and has grown its dividend for more than 30 years in a row.

All that, combined with a yield higher than 3%, makes Nestle appeal to many dividend investors.

One thing that shouldn't be forgotten is that a Dollar generated from dividends isn't worth more than a Dollar generated from price appreciation.

As we can see, anyone who invested in Nestle over the past decade would have done much better investing in the S&P 500. Therefore, before investing in Nestle today, investors must ask themselves if there's anything different with the company's prospects today.

Undeniable Market Saturation & A Cannibalization Problem

Staple companies have been great investments for long-term investors who got in early. How early? Some many decades ago.

That means before staple giants like Nestle, PepsiCo ( PEP ), or Procter & Gamble ( PG ), were in every part of the world.

Today, every staple category is already fully served. Geographic expansion has almost zero runway, and there's no real innovation in the industry. In addition, worldwide population growth slowed down materially.

Even when there is a new product line, it's most likely cannibalizing another line. For example, Nestle's low-fat or sugar-free SKUs are taking at least some share from its less healthy products.

In addition, large-scale wholesalers like Costco ( COST ) and Walmart ( WMT ) are consistently growing their share of the pie, with cheaper alternatives to name-brand products.

Nestle Q1'24 Presentation

It is then no surprise that Nestle's RIG, which is reflective of mix and volume, has been negative for 5 out of the last 6 quarters.

For 2024, Nestle said it expects organic growth of 4%, which means reported growth will most likely end up in the negative for the second year in a row. For context, consensus estimates expect revenues to end the year flat.

While Q2 should be better simply by easier comparisons, I don't think that's anywhere near enough to fuel optimism for steady growth acceleration.

Efficiency Initiatives Aren't Progressing Fast Enough

In 2023, Nestle had an EPS of CHF 4.24. That is slightly below the company's 2019 EPS, despite a 10% decrease in share count over that period.

With revenues not growing, the only driver for profit growth is margins, but it's difficult to improve profitability at Nestle's scale. The company has to invest in sales & marketing to defend its market share, cost inflation is still happening, and Nestle isn't going aggressive on the layoffs front.

Created and calculated by the author using data from Nestle financial reports.

As a result, the company ended 2023 at pre-pandemic margins. This is an improvement, but management's guidance for a slight incremental improvement in 2024 reflects that surpassing historical levels of profitability will be a tough task.

Valuation & The Right Multiple For A Stagnating Dividend Aristocrat

Nestle is trading at 21 times 2024 earnings based on consensus estimates. Relative to history, this is a low multiple for this dividend aristocrat.

In fact, we can see that Nestle's current multiple is close to being the lowest it ever was since 2010. However, that is true for many other consumer staple names as well, as it seems, the market is no longer willing to pay a premium for the stagnating stalwarts in the category.

The reality is that if stock prices eventually follow earnings, companies like Nestle can't keep up with the high-single-digit growth of the S&P 500.

Created and calculated by the author.

If we take Nestle's 2023 P/E and divide it by its expected 2024 growth, we get to a PEG of 6.6x, which is more than twice as high as the S&P 500.

In my view, this clearly shows Nestle's valuation isn't low enough to justify buying, especially with the amount of uncertainty that's surrounding the company's growth prospects.

I just don't see a path for a prolonged stretch of positive growth, with currency headwinds, rising private labels, and the saturation problems we discussed.

Furthermore, the company's cost-cutting projects are not aggressive enough for it to become an attractive margin expansion story.

I would rate the company a Sell, but I don't expect a sharp decline in the stock, but rather a long stretch of treading water or slowly declining.

Investors should resist the urge to invest in a known dividend aristocrat just because it's trading below its historical average multiple.

There's a reason Nestle has been underperforming the market for the last decade, and that's the company's inability to drive growth.

It's nothing against Nestle, it's just the reality of it being the largest staples company in the world in terms of sales. There aren't enough growth opportunities, especially not ones that don't come at the expense of already existing products.

I would rate Nestle a Sell, but to me, such a rating means a recommendation to short a stock. I don't expect Nestle's shares to decline materially from here, but rather continuously underperform the market.

Therefore, I urge individual investors to allocate their money elsewhere, but rate Nestle a Hold.

Editor's Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.

This article was written by

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Nestlé S.A.: Achieving a global cloud transformation

Explore nestlé’s journey with sap.

With sales of more than one billion products a day, Nestlé S.A. is one of the world’s largest food and beverage companies. And with over 2,000 brands in 188 countries, the company’s operations are as large as they are complex. Nestlé’s journey with SAP began 20 years ago when it standardized its global ERP systems. Today, cloud solutions from SAP help support the digitization of everything from advanced analytics, customer experience, sustainability tracking to workforce and talent management. 

Employees worldwide have a single point-of-entry to all SAP applications.

Increased system availability with a simplified global it infrastructure., terabytes of data moved to the cloud., the challenge, strengthen the core: building an it infrastructure fit for global scale and complexity.

To stay in the hearts and minds of consumers for 156 years as Nestlé has, you need to embrace change. But when your company sells more than a billion products each day and employs more than 275,000 people who manage over 2,000 brands in 188 countries, that’s easier said than done. 

Nestlé’s business models and routes to market are changing as constantly as the world around us. Consumer expectations have shifted, and digital commerce is accelerating quickly. Supporting a future ready workforce with great employee experiences and efficiency at scale.  

Nestlé knew that at the core of every successful company is a solid IT infrastructure built to utilize data and provide the business insights that guide decision-making. And so it began its digital transformation journey.

The Solution

Transforming with a seamless journey to the cloud.

To ensure a smooth, disruption-free transition to a more dynamic, reliable, and scalable infrastructure, Nestlé selected the RISE with SAP solution—a complete offering of ERP software, industry practices and outcome-driven services designed to help companies take advantage of cloud computing in their mission-critical, core systems. With its global cloud transformation, Nestlé is now able to automate business processes across its operations, create innovative business models at global scale and achieve greater agility and resilience. 

All of Nestlé’s cloud solutions are integrated and feed into its analytics tools allowing 275,000 employees worldwide to have a single point-of-entry to all SAP applications. This is a major game-changer, reducing the time and effort to manage IT systems. 

With help from SAP Services and Support , including SAP MaxAttention services and the SAP Solution Delivery Center group, Nestlé shut down nine data centers and more than 10,000 servers. This enabled the company to migrate thousands of applications, 300 instances of SAP software, and a total of 1,200 terabytes of data to the cloud. Despite the size and complexity of the project, it was delivered on time, on budget, and without disruption to the business.  

“What we have between the Nestlé IT teams and the SAP Services and Support team is a true partnership that delivered on an ambitious transformation program—one that’s critical to Nestlé’s future success in the marketplace,” Chris Wright, CIO. 

Optimizing recruitment to retirement processes

One of the first areas of Nestlé’s digital transformation was the transformation of HR systems. The company used SAP SuccessFactors to standardize and automate HR processes that support everything from recruitment to retirement. Nestlé also uses SAP Business Technology Platform (SAP BTP) to develop custom extensions of SAP SuccessFactors for situations such as high-volume hiring during seasonal surges.  

By creating a hiring application that allows for batch handling and validation of employment data, Nestlé sped up the hiring process and made it much less cumbersome. Additionally, Nestlé now has a chatbot that speaks over 20 languages and answers simple and common questions from thousands of candidates each week without input (interactions) from HR professionals, providing a more seamless experience to the candidates and allowing the Nestlé team to focus on other work.

Giancarlo Pala Head of IT HR / Nestlé S.A. 

Transforming Customer Experience with One-Stop Shop

Nestlé is enhancing the customer experience for its business customers by streamlining the ordering, tracking, and invoicing processes. The existing approach relied on frequent telephone contact, resulting in time-consuming processes and potential errors. To overcome these challenges and adapt to the "Consumerization of Commerce," Nestlé implemented a global platform based on SAP Commerce Cloud. This platform eliminates the need for telephone contact by providing real-time insights into orders, invoices, and delivery information.

By offering a digital self-service portal, Nestlé improves the ordering and payment process, making it easier, quicker, and more efficient for retailers, wholesalers, supermarkets, and distributors. The unified one-stop shop built on SAP Commerce Cloud has revolutionized the previous customer service approach, reducing waiting times, enhancing flexibility, and ensuring transparency. This transition aligns with Nestlé's recognition of the importance of offering a seamless digital customer experience to stay competitive and meet evolving consumer expectations. The implementation of the platform not only benefits customers but also optimizes internal processes, increases flexibility, and supports Nestlé's sustainability efforts through paperless invoicing and better insights into orders, deliveries, and transportation.

Pablo Nill  Sr. Product Group Manager Customer Service Information Technology / Nestlé S.A. 

Better IT infrastructure means better business efficiency and agility

Nestlé has seen a range of benefits from its implementation of RISE with SAP, which has enabled a rapid and cost-effective cloud transformation, reducing costs, and improving the security and compliance of its applications. In simplifying its global IT infrastructure, the company has increased systems availability to 99.97% with outage times reduced from six hours to seven minutes. With SAP BTP, the company can now deploy digital assets 10 times faster than before, increasing business agility and reducing time spent managing IT. 

Business units such as human resources have seen improvements in their operations, too. Not only do they benefit from innovative applications like the multilingual chatbot, but increased automation has helped streamline and automate processes. Nestlé has also standardized the annual bonus and salary review processes across the company. Instead of taking a different approach in each country, 15,000 managers in more than 100 countries now use one common solution that has automated 95% of review processes.  

The transition to a customer-oriented approach and improved customer experience has yielded significant benefits. The reliance on the internal ERP system has diminished with the implementation of SAP Commerce Cloud, enabling easier connections and freeing the company from IT system constraints. This enhanced flexibility has led to smoother processes and better visibility of ongoing activities. Customers can now manage orders and inquiries independently, allowing the customer service team to focus on more complex customer questions or provide additional support to the sales force teams. 

Nestlé has strong commitments when it comes to sustainability and is using the information architecture of SAP to understand how its processes, supply chain, and manufacturing practices can be optimized to achieve these. 

Future Plans

Improving the consumer experience.

With Nestlé’s direct-to-consumer business increasing by more than 14% in the last year, the company is piloting SAP Commerce Cloud-based applications and portals to ensure that the customer has the same shopping experience buying directly from Nestlé as they do from a retailer.  

Nestlé plans to continue its journey to migrate its entire business operations to SAP S/4HANA Cloud, private edition , with finance and procurement already live. 

Nestlé’s digital transformation with SAP is helping to achieve their mission to unlock the power of food to enhance quality of life for everyone. And with SAP cloud solutions at the core, there is nothing stopping the company from fulfilling its purpose to be a force for good. 

SAP helps Nestlé S.A. run better

Key business outcomes and benefits.

• Reduced time spent on IT, allowing the company to quickly adjust business models and enter new markets
• Increased reliability, resilience, and performance of the platform
• Enhanced visibility and transparency
• 70% of hiring tasks now automated, improving data quality and cutting processing time by up to 90% in some markets

Featured solutions and services

• RISE with SAP can transition your current ERP data and processes to the cloud with less risk and without compromise. The bundle of tailor-made ERP software, transformation services, business analytics, and partner expertise guides you along a personalized path to the cloud. 
• SAP S/4HANA Cloud, private edition is a ready-to-run cloud ERP that delivers the latest industry best practices and continuous innovation. 
• SAP Business Technology Platform is a unified, business-centric platform that helps companies decide confidently, act with integrity, connect processes, data, and experiences, and achieve continued business innovation
• SAP SuccessFactors HXM Suite offers individualized experiences and strategic solutions – with mobile self-services available anytime, anywhere that empower employees to reach their full potential. 
• SAP MaxAttention can help you realize the full potential of your intelligent enterprise vision with on-site, premium access to trusted SAP experts, tools, and methodologies that can help deliver your expected outcomes successfully with SAP solutions.
• SAP Commerce Cloud solution provides a trusted e-commerce platform to help you innovate at scale and tap enterprise-wide data to boost profits and customer satisfaction.  

About Nestlé S.A.

Nestlé S.A. is a Swiss multinational food and drink processing conglomerate corporation. It is the largest publicly held food company in the world, measured by revenue and other metrics, since 2014. 

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