INTERNATIONAL MARKETING

CASE STUDY SOLUTION

SUBMITTED TO : Proff. Ajay Prakash Mishra

Submitted By : Arpit Madaan

PRN: 14021021029
BATCH : 2014-17
INTERNATIONAL MARKETING
CASE STUDY SOLUTION FOR ATTENDANCE ON
MARCH 15,2017

How is International Marketing strategy of Nestle different from Unilever ?

Nestle :

Nestl has used its brand name as strength to generate sales and to expand its market
share, which includes it customization of products to fit its target markets profile. Although
Nestl has not always started from scratch, the company has used acquisition as a
penetration strategy to expand and penetrate new international markets, which eliminates
any local barriers to its competition. A few weaknesses which are related to the companys
quality measure resulting in product recalls. The company has decentralized its strategy
units into 7 subunits in charge for different product lines, for instance, one for coffee and
beverages; another one focuses on ice cream and milk products. Nestl brings its
management level employees all around the world for 2-3 week training in its headquarters
in Switzerland to familiarize them with their global culture, strategy and given them access
to the companys top management.

Unilever :

For its marketing strategy Unilever combines its strategy with social project in many
countries. Educational campaigns have been important tools for raising awareness for
Unilever brands such as Close-Up and Dove. The companys partnership with the World
Dental Federation has seen it become involved in oral healthcare projects in both developed
and emerging nations, including Austria and Brazil. In 2006, Unilever developed a low-cost
toothbrush, the Pepsodent Fighter, which retails at a price equivalent to just EUR0.20 and is
distributed in India and Indonesia.

The company also has more directly brand-related programs, including Close-Ups Project
Smile in Nigeria, which used small kiosk outlets to showcase both its products and oral
hygiene information, and the Dove Self-Esteem Fund, which has joined with organizations
such as the Girl Scouts of the USA and the UKs Eating Disorder Association to fund
educational Body Talk programs in schools to improve body-related self-esteem.

Less directly, a Brazilian recycling partnership with Pao de Acucar, a major Brazilian retailer,
not only helped employ more than 300 people in a local recycling co-operative, but also
gave Unilevers products greater in-store prominence as well as raising the profile of brands
including Rexona by having their logos on point-of-sale information and educational
materials.
The companys successful brand innovation program is supported with a high level of
marketing and advertising activities including most media. Investment in advertising and
promotions increased by nearly EUR300 million, from 12.6% to 13.1% of sales in 2006, in
order to support major brand launches. Particularly successful was the Campaign for Real
Beauty for Dove, which continues its global roll-out and campaigns for self confidence. A
central idea behind the companys product development and marketing strategy is that of
Vitality: essentially producing products that are felt to be life-enhancing, to make
consumers feel good, look good and get more out of life

What do they do to localize their brands in guest countries?

Nestls management and our business colleagues think a brand can become a major
commercial asset for the company then it will be positioned as a strategic brand. We have
worldwide and regional strategic brands, the latter serving a specific geographical zone or
continent. All associated brand communication and positioning for strategic brands is
defined by the business units at headquarters and endorsed by management. All the local
Nestl companies that want to use the brand need to apply the associated brand guidelines.

Local brands, which are most relevant to specific markets and respond to local needs and
tastes, vary in number from business to business. There is greater latitude in communicating
about and using these brands. Some of them can be extremely valuable and are critically
important for the market concerned.

We regularly review and make adjustments to our brand portfolio and eliminate those that
are no longer commercially relevant. With the explosion of social media platforms, there is a
clear tendency to rationalize, globalize and move to a one-brand strategy. This not only
simplifies the communication around our brands, but also makes it easier for us to connect
with our consumers and helps build faster international awareness of them.

Unilever

1. HUMANIZE THE GLOBAL BRAND WITH A VISION AND MISSION THAT INSPIRES (AND
TRANSLATES IN) LOCAL MARKETS

2. REORGANIZE FOR GLOBAL-LOCAL ALIGNMENT AND RELATIONSHIP-BUILDING

3. SHORTEN THE FEEDBACK LOOP BETWEEN LOCAL AND GLOBAL

4. STREAMLINE CONTENT ACCESS AND GUIDELINES

5. FOCUS ON DRIVING ADOPTION OF GLOBAL SYSTEMS AND PROCESSES

How do they compete with local brands? How are their strategies different ?

Nestle:
Nestls success is based firmly on the concept that food is a local matter. Although our
products are available in virtually every corner of the world, we dont believe in a standard
worldwide taste. On the contrary, we go to considerable lengths to adapt our products to
local consumers tastes. These can vary widely, not only from country to country, but even
inside a country. To meet local needs, there are more than 10,000 Nestl products. Almost
500 factories in over 80 countries produce them. Different cultures, different geographies,
different needs, tastes, flavours and habits all influence what our consumers eat and drink.
So its vital that we have local knowledge and local experience.

Getting close to their consumers Nestl employees spent three days living with people in the
suburbs of Lima in Peru to understand their motivations, routines, purchasing habits,
decisionmaking and everyday aspects of their life. Based on what they learnt, Nestl created
the NutriMvil advisory service, a mobile exhibition van that goes into the busy back streets.
Here our Nestl nutritionists can talk one-on-one with mothers. Relevant Nestl products are
sold in local markets and stalls.
Unilever:

Stung by the sustained loss of market share to regional players, Hindustan Unilever, India's
largest FMCG firm, is now drawing up district-wise distribution and pricing plans.

Regional players have hit Hindustan Unilever where it hurts the most.

Personal care products, the firm's most profitable segment, has been losing market share
consistently over the past several quarters.

The first quarter of this financial year hasn't been too exciting either. Domestic sales grew by
12.8 per cent, with underlying volume growth of about 2 per cent.

Though that was a distinct improvement as volumes had declined by about 4 per cent in the
previous quarter, the country's largest fast moving consumer goods company isn't happy. So
HUL is fighting back.

But to understand its new strategy, let's look at what the competition has been doing of late.
Chennai-based CavinKare, the second largest manufacturer and marketer of shampoo in
India with brands like Chik, Nyle, Meera and Karthika, came out with single serve packs to
make inroads into a market dominated by multinationals like Hindustan Unilever's Sunsilk
and Clinic All Clear.

Similarly, Anchor Health & Beauty Care took on HUL's Pepsodent and Close-up by launching
100 per cent vegetarian Anchor toothpaste. It also forced the market leader to drop prices to
retain consumer loyalty.

In detergents, too, smaller regional players like Ghadi, Sasa and Power have dented the
volumes and market share of HUL's Rs 2000 crore (Rs 20 billion) detergent brand Wheel.
Likewise, in soaps, Wipro Consumer Care and Lighting's Santoor has now become the largest
soap brand in South India and Godrej Consumer Products Godrej No 1 is the market leader in
the lucrative Northern market.
Stung by the loss of market share, HUL is now tweaking its go-to-market strategy by
focusing on individual states and even districts. The strategy is 'glocal' -- think global, act
local.

"There are three key things that we are trying to do," says Gopal Vittal, executive director,
home and personal care, HUL.

The first is winning state by state. Each state presents a different nature of competition and
a different growth challenge -- whether it is increasing penetration or driving consumption
through deployment of the relevant portfolio, Vittal says.

The state-led distribution strategy will give the Anglo Dutch Unilever's Indian unit an
opportunity to play out its full portfolio of brands to arrest its falling market share and
volumes as consumers were down-trading to smaller regional brands.
The company is now strengthening its regional brands like Hamam in Tamil Nadu; Rexona in
Andhra Pradesh and Karnataka; Breeze in the Hindi belt and Sunlight in Kerala and West
Bengal.
The maker of Lifebuoy, Wheel and Lux is also playing the pricing game -- it has already
reduced the price of Lifebuoy by Re 1. This was necessary as the latest Nielsen data showed
that Lifebuoy has lost value marketshare and was down 176 basis points year-on-year (y-o-
y). Likewise in detergents, volumes declined 8.8 per cent y-o-y over the same period, last
year.

That's something the company wants to correct as fast as possible. The stakes are high
indeed - for example, Wheel is a crucial volume grosser for the company and HUL has no
option but to ensure that consumers stay with the brand.

So HUL has identified 'right pricing' as a primary tool to increase its competitiveness in a
market where most of its brands were losing customers to their rivals.

A key enabler to 'right-pricing' is reducing the cycle time substantially, says Vittal. What this
translates into is a more flexible supply chain at the backend, consolidation of distributors,
reduction of inventories at distributor points, more frequent despatches and therefore
greater speed at the front end.

The second part of the strategy is greater focus on Return on Marketing Investment. "We are
looking at different aspects like promotion, distribution and advertising to understand what
drives growth and how much growth. We have developed a model and are using this across
the company to make decisions of investment dynamically. Based on this we have
substantially increased investments on our brands," Vittal says.

The third part of HUL's strategy is increasing the quality and speed of innovations and
launches that it brings to the market. In the just concluded quarter, the company's y-o-y
advertising spends increased by 26 per cent.

During the quarter-ending June 30, 2009, the company stepped up its investment on brands.
The quarter also saw activities across segments -- in soaps, Lifebuoy and Liril were re-
launched; and in shampoo, Clinic All Clear was relaunched. There were new brand launches
-- Ponds White Beauty, the premium skin lightening cream, and Vaseline Healthy White body
lotion.

A global brand Cif, in the surface cleaning segment was introduced. In oral care, Pepsodent
returned with its orginal proposition of fighting germs for longer hours. And Wheel saw its
net content (grammage) increase.