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Pitch CMO Summit 2011: Nestle – Keeping it fresh

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It is now a cliché to call the present generation a fast paced one. However, for marketers, this cliché becomes the greatest challenge. Nestle has produced cult brands such as Maggi and Nescafe and with changing times, the meaning of these brands has also evolved.

The challenge
For Nestle, the challenge has been to keep these brands alive in the minds and hearts of consumers. With uncertainty and change being the only constant, this challenge becomes an obvious reality for brands.

Also, in a country like India, complexity is a given with high disparity in behaviour, class and beliefs. Targeting consumers in this complexity also becomes a challenge for a brand like Nestle. It thus becomes important to build a strong brand and maintain it. Volatility, uncertainty, complexity and ambiguity (VUCA) become the hurdles in this
endeavour.

Antonio Helio Waszyk, Chairman & Managing Director, Nestlé India

The strategy
For Nestle, the understanding of the changing Indian society remains to be the greatest strength. This understanding included viewing India as a diamond rather than a pyramid. It is a diamond both in value and structure. Geometrically, while a pyramid is very static, a diamond is dynamic and consumer opportunities in India are exactly the same- dynamic. The consumers today have very high aspirations, which are independent of the economic class they belong to. However, even if these aspirations are similar, the access to these aspirations is dissimilar. More opportunities are now available for the average Indian consumer.

The key strategy for Nestle has been regionalisation, digitalisation and merchandising. To build a brand the Nestle way, it has taken up steps like knowing consumers deeply, inspiring with brand vision and essence, delighting with product experience, innovating and creating engaging brand experience. Nestle’s consumer insights have helped it to plan the strategy for the brand. It realised that the Indian consumer is ‘she’, who is 26 years old and is talking on phone most of the time. Nestle also realised that courtesy the changed role of the woman, it is she and the child who decide what goes into the shopping basket. The male does not have a say in it. It thus became imperative for the brand to target women and children.

The implementation
There has been a common perception that Indian consumers like goods that are low in price. However, Nestle has come to understand that the Indian consumer appreciates not just price but value as well. A product or a service clicks with consumers not just because of its price but also because of its features, benefit and value; price is a component of value.

As price of commodities increases and investment in advertising decreases, brands need to find opportunities in a different kind of communication. Nestle feels that a regional approach to advertising becomes much more effective, both in terms of impact and cost, in such a scenario. Approaching six to seven prominent regions, and having a regional approach rather than having one national spot on a national channel has worked better for Nestle.

Also, staying connected with consumers is a must for every brand. Nestle has used the digital medium to connect with consumers. Nescafe created a ‘know your neighbour’ Facebook page which was a continuation of Nescafe’s TV campaign starring Deepika Padukone. Around 1.5 million people interacted on the page. The use of Bollywood stars in television campaigns and simultaneous digital campaigns on social media sites is helping the brand connect with the audience.

Merchandising is another strategy that Nestle is taking up. Antonio Helio Waszyk, Chairman& MD, Nestle India, feels, “How so much communication you do, what matters is the ‘last square feet’.” The placement of the product in the shelf, the communication of the experience, the communication of the benefit of the product, and the communication of the values of the product at the point of sale are important factors that contribute to the awareness of a brand. He reinforced the importance of point-of-sale as that is the moment of truth for marketers.

For Nestle, reach and frequency are not the factors to analyse the effect of communication. The mantra for Nestle has been to attract and engage. This is because hours on TV do not necessarily mean great impact. If one likes a communication, watching it once will do the trick. Also, repetitive communication on television means a lot of money. Like many other marketers, Nestle has also come to realise that one way communication with the audience results in passive consumers, who do not connect with the brand. It thus becomes important for marketers to listen to consumers and give importance to their voice and opinion.

To build a brand the Nestle way, knowing the consumers deeply is of strategic importance. Consumer insights and inputs contribute in the development of the product and the positioning as well. Maggi, which is a cult brand under mother brand Nestle has been developed on the basis of consumer insights. Noodles are not a part of the Indian platter; masala, however, is. Nestle played on this very aspect and interviewed 2,000 consumers to know how they cook their masala. It was after this primary research that Maggi came up with its classic masala offering. Understanding how consumers cook and eat contributed to the innovation. Two years ago, Maggi and Top Ramen were the only brands in the instant noodles category. The category is now growing with three new entrants.

Inspiring with brand vision and essence has also been an important part of Nestle’s strategy of building brands. Maggi’s positioning five to six years ago was convenience. The tagline for the brand was ‘Fast to cook, good to eat’. With changing times, Nestle realised that convenience became a given, which had to be provided to consumers anyhow. If a marketer did not give convenience, the consumer would not buy the products. With the advent of the ‘health-conscious’ generation, Nestle moved to ‘Taste bhi, health bhi’.

Waszyk says, “Good marketing for me is not to reinvent every two-three years. For me, it is being consistent.” Nestle has kept the brand’s essence intact and has evolved in terms of communication. Innovation is another factor that has been at the core of Nestle’s marketing strategy.

Another part of Nestle’s strategy has been to create engaging brand experiences. This has been achieved through various advertisements that help create brand awareness and brand connect.  R&D and differentiation have also been considered as important factors which distinguish ‘players’ from ‘competitors’. According to Waszyk, “A competitor will have his focus on the product, the communication, the regionalsation and add value to the category. A player will come, leave the product on the shelf and go.”

The result
Nestle has been successful in maintaining its leadership in the instant noodle category despite the entry of new players. The brand has been able to maintain a strong presence in other categories as well courtesy its strong positioning, regionalisation, digitalisation and merchandising.

About the author / 

Jyotsna Sharma

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