Nestle starts exploring a new marketing approach

NESTLE has started testing a new marketing communications ap- proach in which various markets are grouped by their similarities in terms of experience instead of by geographical proximity. 

Nestec Ltd vice-president/director of marketing communications Tom Freitag said the food giant had begun to look at how to cluster countries based on “need states”. 

“For example, the experience that Malaysians have with Nescafe may be similar to the experience that Chileans have or that we have in Canada,” he told a group of Malaysian journalists in Vevey. 

“So we don’t look at the world as one but we look at markets by similarities in terms of their experiences to date, the experiences that we would like them to have in the future with our brands, the types of brands. It’s a more holistic look, not based on our view but based on how consumers are reacting to or interacting with our brands today.”  

Freitag said Nestle started this approach on Nescafe and its ice-cream products about a year ago. “We’re looking for ways of bringing some synergies to the way we approach the marketing of our brands, based on where the markets are as opposed to artificial geographic (boundaries). It’s based on how people deal with our brands.”  

Freitag, who headed Ogilvy & Mather (one of Nestle’s advertising agencies) in Malaysia from 1994 to 1999, said this approach was in its early days but “it’s something that I think is going to pay great dividends for Nestle.” 

“If we can use the learning in one market and apply it to four other markets, it makes sense to do it. It’s taking the scale of Nestle but still treating our brands very much local,” he said. 

The way Nestle communicates its brands is, by and large, local.  

“We’re not trying to develop one global campaign and say every country must run it. We tried it on Nescafe about two years ago and it wasn’t successful. We’ve taken a step back and now say the most important thing is we have a consistent strategy but the application must be local because countries have different tastes, different attitudes and different expectations of communication,” he said. 

On advertising and promotion spending growth, he said it was overall flat for Nestle and that it did not have to outspend its competitors but rather to outsmart them.  

“Our brand people have to get out from behind their laptops and get out into the marketplace (to gain consumer insights),” he added. 

At present, Nestle has even started branding the active ingredients in its products, such as Prebio 1 and Calci-N in its dairy products and Actigen-E in Milo. Won’t it confuse consumers with various food companies coming out with these so-called “branded active benefits”? 

Nestec assistant vice-president (nutrition strategic business division) Edward Fern agreed it’s not easy to communicate to consumers. “If you have a good story and you tell it badly, it ceases to be a good story,” he said.  

Ultimately, he said, consumers would have to read the fine print on the packages to learn exactly what are the health benefits, just like they did when vitamins were first introduced in breakfast cereals. 

Fern said one reason for branding a benefit is that Nestle has put a lot of science behind it and the logo serves as a guarantee that it has the right nutrients and the right amount. 

He also noted that Nestle would have certain branded active benefits across various product brands, so having a brand for the benefit would ensure that it need not communicate the benefit all over again when it was introduced elsewhere. 

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