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Nestle - Brand Management

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Nestle - Brand Management

  1. 1. Executive Summary
  2. 2. Nestlé https://www.youtube.com/watch?v=rPl-geZeXKQ
  3. 3. Our Own Brand Association With Nestle Josh • KitKat • Nesquik • Chocolate • Bad Baby Milk • Nescafe Claire • Chocolate • Nesquik • Red • Large • Cereals TK • Weak CSR • Health • Creative • Dairy • Engaging Shannon • Childhood • Chocolate • Family • Food • Milkshake
  4. 4. Brand Architecture • Nestle is the world’s largest food group, with over 2,000 brands in a multitude of markets, each with their own individual brand knowledge structure. • Nestle’s strongest affiliation in the UK is within the confectionary, coffee and cereals market, with brands such as Shreddies, Cookie Crisp, Kitkat, Nescafe and Aero. • High Brand Recall: Nestle is cognitively associated with the confectionary, cereals and coffee markets, being an instantly recognisable brand for UK citizens. • KitKat, Aero, Smarties, Milky Bar, Quality Street, After Eight and Rowntree's account for 70% of their UK sales. These brands have a symbolic, nostalgic brand knowledge to UK consumers
  5. 5. Enhancing Brand Knowledge • Nestle purchased well known and loved brand Kit-Kat in 1988 • ‘The purpose was not so much to help Kit-Kat as to enhance Nestle's image in the UK by associating it with quality and leadership in chocolate’ (Aaker Et Al, 2000). • Brand familiarity and brand likability are two separate entities. • Understanding the elements of Nestle’s brand knowledge is essential to gauge public perception. • Nestle’s brand knowledge largely negative due to high profile crisis such as animal testing scandals and child labour claims. • Despite this, Nestle bolsters a 15.1% market share of the confectionary market, the third highest in the UK.
  6. 6. Multiple Dimensions of Brand Knowledge • 1- Awareness: Category Identification. • 2- Attributes: Descriptive features of the brand. • 3- Benefits: Personal values and meanings of the brand to an individual (Nostalgic, symbolic, experiential consequences). • 4- Images: Visual Information • 5- Thoughts: Cognitive responses to brand (Usually negative with Nestle) • 6- Feelings: Personal affective responses to brand related info • 7- Attitudes: Overall judgements of the brand. • 8- Experiences: Purchase and consumption behaviours of a brand. (Keller, 2003)
  7. 7. Points of Parity + Points of Difference (POP + POD) • Despite being the market leader, POP + POD are still essential for Nestlé to maintain control. • Nestlé held initial POD in the luxury ice cream market with Haagen Dasz. • Cadbury and Mars soon entered the segment, making this a point of parity to competitors. • However, this gave Nestlé first mover advantage. • Nestlé’s aggressive branding strategy leads to purchases of established brands, limiting start-up costs and risks of launching new products, which also minimises POP as they are acquiring competition.
  8. 8. POD- Characters Nestle has no overall character, however…
  9. 9. Brand Equity ‘Brand equity includes not only the value of the brand, but also implicitly the value of proprietary technologies, patents, trademarks and other intangibles such as manufacturing know-how’ (Reponen, 2000)
  10. 10. Brand resonance • Nestlé must use their branding effectively to counteract negative publicity. • Having a clear brand image will also allow the company to be competitive in low involvement markets such as coffee, confectionary, drinks and cereals markets. • Having a strong branding strategy is key here to enter the evoked list of the consumer. Keller, 2001.
  11. 11. Brand Judgements • Brand Quality: Nestlé has maintained a strong brand image due to effective communications and strong performances of it’s core products. • Brand Consideration: When asked if Nestlé products were appealing over competitor brands, 8/12 said ‘Yes’, with two others ‘Indifferent’. • When asked why they prefer Nestle products, 5/12 said taste, 3/12 said better advertising and 4/12 said personal preference. • Brand Superiority is also an important aspect, with Nestle in a battle with Cadbury Kraft and Mars in many low involvement markets. • Brand Credibility: Nestlé is a high integrity brand, which regularly innovates and conducts market research, ensuring it appeals to it’s key audiences.
  12. 12. Brand Feelings • The majority of Nestlé’s products are low involvement, low risk products. • This makes their brand feelings mild, as they do not invoke a huge reaction from their consumers. Nostalgia is a feeling created by most confectionary and cereal products. • However, brands such as Nescafé aim to make consumers feel energised and enlightened. • Within these low involvement markets, it is key to sell the advantages of choosing their products over a competitors. Nestlé’s focus on competitive prices, recognisable brands and innovative product launches spark a reaction from their consumers.
  13. 13. Brand Performance • The Nestle brand aims to satisfy the performance needs of their consumers. • In the confectionary, coffee cereals markets, they aim to perform in taste and quality. • However, with their mineral water brand ‘Pure Life’, their key performance indicator (KPI) is ‘purity’. • It is essential for products to perform to these basic levels to ensure the customer satisfaction.
  14. 14. Brand Imagery • In the UK market, Nestle aim for ‘Innovation, Health and Sustainability’ • This resonates through their branding, offering fair trade coffees, healthy cereals and pure mineral water. • With operations in ‘unhealthy’ markets such as chocolate bars and sugar based cereals, it is essential that they maintain a strong image with regards to Coporate Social Responsibility (CSR) • Their image has already been impacted with previous poor CSR, which has impacted their image. • Overall, Nestlé is perceived as an innovative food market player, which in recent years has improved it’s global image through strong branding and marketing practice.
  15. 15. Brand Salience • Red logo prominent on all products, with individual branding strategies for each product line. • When asked, 10/10 people associated Nescafe with Nestle. • However, when asked who owns Rowntree's, 3/10 were able to identify Nestlé. • Despite this resonance, Rowntree’s still remains a successful product, being of the highest selling confectionary brands. • Nestlé operates with high salience, ensuring it’s branding is seen by the mass and niche markets their array of products appeal to in a congruent manner.
  16. 16. Brand Values • Integrity coupled with a strong work ethic • The desire to do quality work • Friendly, open and honest communication • A spirit of co-operation and openness to other ideas and opinions • A realistic approach to business • An openness to future trends and new business opportunities • A passion for our products and brands
  17. 17. Customer Lifetime Value • Nestlé aims to have a product line for each stage of a typical consumers life cycle, from their infancy to their retirement stage. • Nestlé operates in the baby food market, breakfast cereal targeting toddlers/ children, coffee markets for teens/ adults and other products to target all ages. • Covering each facet allows brand loyalty to be developed, with attitudinal behaviours deciding on a certain product. • ‘The proportion of customers you retain can result in a disproportionately high rise in profits – 5% retention rate can result in a 25-100% increase in profits’ (Reichheld et al, 2000) • Trust is key to determine this, Nestlé must communicate in an appealing way to each specific market
  18. 18. Corporate Branding • Corporate branding is a major concern for Nestlé, with the company being a multi-brand corporate. • Having multiple sub-brands in different segments creates more oppurtunities for negative implications. • Ensuring the brand has core values which remain congruent throughout is essential to create corporate brand equity. • Corporate branding requires ‘paying greater attention to the role of employees in the brand building process’ (Harris, 2001). • 330,000 employees require training to meet this congruent brand image. • ’The rise in corporate brands may be ascribed to their perceived value and greater influence among stakeholders and consumers’ (Laforet, 2014)
  19. 19. Corporate Brand Awareness Thoughts: Cognitive responses to brand (Usually negative with Nestle) (Keller, 2003) • Nestle Nutrition and other sister companies look to build on negative publicity through CSR campaigns. • As the #1 food brand in the world, Nestlé already has high brand recognition. • Partnerships with charities also look to influence opinions and change the ethical standpoint of the overall market.
  20. 20. Gap Analysis (Schultz, 2003) Gap Analysis- Growth Drivers Essential Elements in place to build upon What we need to stop/ change Essential next steps Nutrition, Health and Wellness - Partnership with Ebode (Obesity awareness) - Fair Trade - Good Food, Good Life - Improve Fair Trade linkage. - Focus on CSR strategies and Social Media training - Stop unethical behaviour through supply chains. - Increase awareness of CSR strategies. - Emphasise Nestlé Nutrition. Emerging markets and Popularly Positioned Products - 44.2% of group sales came from outside the developed world. - Latin growth up by 11% in 2014 (Wright, 2014) - Change marketing strategies in African markets. - Reputation management and restoration in the UK and Africa. - Launching new products in existing markets to increase market share. - Developing brand in Russian market. Premiumisation - "30% of our sales last year were linked with innovations in the last two to three years“ (Bulcke, 2014) - Identifying nutritional and premium benefits - Change premium strategy in UK market. - Premium products linked to existing brands. - Target ‘emerging middle class’
  21. 21. Brand Elements
  22. 22. Brand Elements Nestle Nestlé: (1 Poor, 5 Excellent) Memorable Meaningful Likable Transferable Adaptable Protectable Brand Name 4 3 2 3 3 5 Logo 2 2 3 4 2 5 Slogan 3 4 4 3 4 5 Packaging 3 4 3 4 4 5 Characters 5 5 5 4 5 5
  23. 23. Brand Mantra “Brand mantras typically are designed to capture the brand’s points-of-difference, that is, What is unique about the brand. Other aspects of the brand positioning—especially the Brand’s points-of-parity— may also be important and may need to be reinforced in other ways.” (Kevin Keller 2013) “Good Food, Good Life is a great summary of Nestlé’s mission to balance great taste and nutrition, and to help consumers make healthier choices.” • Sums up corporate ambition • Commitment to nutrition, health and wellness
  24. 24. Slogan: Do you love anyone enough to give them your last rolo? 1980’s Rolo advert (axed in 2003) voted most romantic due to slogan “do you love anyone enough to give them your last Rolo?” Beat John Lewis’ Christmas adverts. “Rolo’s slogan is so ingrained in the public psyche that you could ask someone on the street today and they would find it just as current as it was in the 1990s.” Marketing editor Rachel Barnes. www.youtube.com/watch?v=1YZ4R1fNYzI
  25. 25. Slogan: Yorkie – “Not For Girls” Created and branded in 2002 Banned in 2012, replacing the slogan with the word “original” relating to the flavour Andrew Harrison, the marketing director at Nestle. "Most men these days feel as if the world is changing around them and it has become less and less politically correct to have anything that is only for males
  26. 26. Brand positioning • Product Usage occasion: Nescafe and KitKat • Positioning by product Benefits on Health: Cereals, Maggie seasoning, Milo and bottled water. • Positioning by product Attribute: Optifast meal replacer, Boost: energy drink and Resource formula.
  27. 27. 2010 Social Media Crisis Early 2010 Greenpeace launched a campaign highlighting Nestlé's palm oil sourcing practices. Take a Break viral ad campaign featuring an office worker gnawing on an Orang-utan's finger instead of a Kit Kat Bar. The tag line was Kit Kat Killer. Nestlé's Facebook page was overrun with people begging Nestle to stop using palm oil and killing the orang-utans. Nestle deleted many of them and posted the following message. “To repeat: we welcome your comments, but don’t post using an altered version of any of our logos as your profile pic—they will be deleted,”
  28. 28. The Comments They Did Reply To…
  29. 29. What They Did • Force the video’s withdrawal from YouTube, citing copyright. • Deleted negative social media comments but replied to a few • Suspended sourcing from Sinar Mars • Held meetings with Greenpeace, which gave them details of their palm oil suppliers • Partnered with trusts that would impress Greenpeace • Made sustainability a brand value. • Apologise Immediately • Respond to both positive and negative consumer queries in a professional manor • Social media guidelines regarding what can and cant be discussed with consumers online. • Research suppliers before working with them, better understanding of the supply chain • Keep consumers up to date using social media, to inform them they have partnered with charities. What They Should Have Done
  30. 30. Corporate Social Responsibility Goals (CSR) They aim to improve water efficiency across their reduce absolute water usage by 50% by 2020 Determined to play our part in reducing greenhouse gas (GHG) emissions by improving resource efficiency, switching to cleaner fuels and investing in renewable energy. In the UK and Ireland, 92% of the packaging used was already recyclable. They aim to achieve 95% recyclability of packaging by 2015. Set goal in the UK of achieving zero waste to landfill from each of their factories by 2015, with full recovery of unavoidable by-products. They have signed up to the Freight Transport Association’s Logistics Carbon Reduction Scheme which aims to reduce CO2 emissions by 8% by 2015.
  31. 31. Evaluation • Through qualitative and quantitative research, we’ve found 3 key areas of branding which Nestlé need to focus on. EXPAND ON FRIDAY
  32. 32. Possible CSR Venture- Event Marketing • June 2010 Nestle waters brand Perrier completed 33 years as a prominent sponsor at the French championship Roland Garros. • Huge sales opportunity – 57,000 bottles sold to public during tournament. • Nestlé should host more events such as this to further boost it’s co-branding strategy.
  33. 33. Celebrity Endorsements • - Necafé’s George Clooney endorse was one of the most successful celebrity endorsements in recent history, with a 30% increase in sales from 2007-2008. • This endorsement was primarily targeted at women, lowering the product sales percentage of men. • - However, despite the success of this endorsement, none of their other popular confectionary products feature any endorsements. • This could be an altered aspect of their marketing programs which improve overall branding.
  34. 34. Co-Branding • Popular Milo Marathon in Philippines – Continues to have strong brand association. • Promotional efforts are shared by the Milo marathon and Nestle to bring greater attention to the branded event. • Sales at Nestle Philippines have grown at 4% for the last 10 years.
  35. 35. Scale Measures for Smarties Animation Appealing Modern Creative
  36. 36. Levels of Brand Hierarchy Company Brand Level Family Brand Level Individual Brand Level Modifier Level Product Descriptor http://www.catslikefelix.co.uk/food/Pag es/range.aspx Nestle Pet Care
  37. 37. Any Questions?
  38. 38. Bibliography • Aaker, D., Joachimstaler, E, (2000) The Brand Relationship Spectrum: The Key to The Brand Architecture Challenge, California Management Review, Vol42, Issue 4. • Askew, K. (2014) In the spotlight: Nestle looks to combine nutrition, premiumisation, http://www.just- food.com/analysis/nestle-looks-to-combine-nutrition-premiumisation_id125878.aspx [Last Accessed 9th March 2015] • Eisenberg, N., Strayer, J. (1987) Critical Issues in the Study of Empathy, in Empathy and Its Development, Cambridge University Press, Cambridge. • Harris, F. (2001) Corporate Branding and Corporate Brand Performance, European Journal of Marketing, Issue 4. • K. L, Keller. (2001) Building Customer – Based Brand Equity: A Blueprint For Creating Strong Brands. Marketing Science Institute. 1(2), pp.1- 7. • Keller, K. (2003) Brand Synthesis: Multidimensionality of Brand Knowledge, Journal of Consumer Research, Vol. 29. • Laforet, S. (2014) Managing brand portfolios: audit of leading grocery supplier brands 2004 to 2012, Journal of Strategic Marketing, Vol. 23, Issue 1. • Reichheld, F. & P. Schefter (2000) ‘E-Loyalty: Your Secret Weapon on the Web’, Harvard Business Review, July-August, 105-113 • Reponen, T. (2000) Management expertise for the new millennium, Turko School of Economics, Turko. • Schultz, M. (2003) Bringing the corporation into corporate branding, European Journal of Marketing, Vol. 37, Issue 2. • Singh, J. , Kalafatis, S. , Ledden , L., (2014) "Consumer perceptions of cobrands: the role of brand positioning strategies", Marketing Intelligence & Planning, Vol. 32 Iss: 2 • Wright, C. (2014) Nestlé Playing Emerging Markets Through Western Blue Chips, http://www.forbes.com/sites/chriswright/2014/03/31/nestle-playing-emerging-markets-through-western-blue-chips/ [Last Accessed 9th March 2015]

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