Nestle lc1 presentation

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Nestle lc1 presentation

  1. 1. Managing Internal Growth and Nestle: The Story of LC 1 Presented by: Diana Lim
  2. 2. The Company <ul><li>Founded 1866 in Switzerland as an infant nutrition company </li></ul><ul><li>480 factories </li></ul><ul><li>276,050 employees worldwide </li></ul><ul><li>business volume in 2006 over $ 100 billion </li></ul>
  3. 3. Business Strategy <ul><li>Encourage product growth through innovation and renovation </li></ul><ul><li>Internal growth strategy </li></ul><ul><ul><li>Develop new products </li></ul></ul><ul><ul><li>Renovate existing ones </li></ul></ul><ul><li>Develop innovative ideas  transform ideas into successful products </li></ul>
  4. 4. Internal Growth Drivers <ul><li>4 pillars for would drive Nestle’s internal growth worldwide as identified by Peter Brabeck (CEO) </li></ul><ul><li>Operating Excellence </li></ul><ul><li>Innovation and Renovation </li></ul><ul><li>Product Availability </li></ul><ul><li>Communication </li></ul>
  5. 5. The Story of LC 1 <ul><li>research team in Switzerland discovered a culture called Lactobacillus acidophilus, or La-1 </li></ul><ul><li>contains a probiotic agent, which is living microbial feeding supplements that allow the lower intestine to function better </li></ul><ul><li>No immediate plan to introduce in into yogurt </li></ul>
  6. 6. The Story of LC 1 <ul><li>James Gallagher – European coordinator for chilled products </li></ul><ul><li>Andrea Pfeifer – leading scientist at the Research Centre </li></ul><ul><li>Create a new segment on the yogurt market </li></ul><ul><li>Position itself as a functional food </li></ul>
  7. 7. Launch of LC 1 in France <ul><li>Launched 1994 </li></ul><ul><li>Not the success that Nestle had hoped </li></ul><ul><li>Reasons: </li></ul><ul><ul><li>LC 1 arrived late; Danone already in the market </li></ul></ul><ul><ul><li>Consumers didn’t believe it tasted better than other yogurts </li></ul></ul><ul><ul><li>Purchased based on claims; decision not to repurchase was based on taste </li></ul></ul><ul><ul><li>Too scientific to understand benefits </li></ul></ul>
  8. 8. Failure <ul><li>Danone’s Actimel </li></ul><ul><li>Japan’s Yakult </li></ul><ul><li>Both have outsold LC 1 </li></ul><ul><li>LC 1 failed in France and UK – delisted </li></ul><ul><li>LC 1 Go!: introduced 1998 pulled out 2000 </li></ul><ul><li>Nestle Brand – associated with Ice cream and indulgent desserts </li></ul><ul><li>Marketing Strategy </li></ul>
  9. 9. Launch of LC 1 in Germany <ul><li>Launched in 1995 </li></ul><ul><li>Highly successful in Germany </li></ul><ul><ul><li>No clear market leader in Germany </li></ul></ul><ul><ul><li>Yogurts that made health-based claims were new to the market (differentiation) </li></ul></ul><ul><ul><li>German consumers preferred the taste of LC 1 </li></ul></ul>
  10. 10. SWOT Analysis Strengths Weakness Strong R&D Team/ food science Late entry into market Low cost operator Positioned as too scientific Opportunities Threats Health consciousness Mature markets Introduce more health-based products in Germany Intense competition
  11. 11. Reflecting on the Success of LC 1 <ul><li>Understand technical ideas  transform into marketing ideas </li></ul><ul><li>R&D process people must talk to business people early on in the process </li></ul><ul><li>Think of product concepts: “where could this scientific finding be possibly used?” </li></ul><ul><li>Led to the creation of Nutrition division in 1997 </li></ul><ul><li>Restructured compensation package </li></ul>
  12. 12. Nestle’s campaign for LC 1 <ul><li>First probiotic yogurt </li></ul><ul><li>Supports the body’s defenses </li></ul><ul><li>Special name </li></ul><ul><li>Special design </li></ul>
  13. 13. TV Spot <ul><li>A hedgehog was introduced as a key visual </li></ul>He has his spikes
  14. 14. TV Spot We haven’t
  15. 15. TV Spot That’s the reason why I help my body with health food
  16. 16. TV Spot Everyday
  17. 17. TV Spot With this special milk ferment
  18. 18. TV Spot It’s good for my body’s defenses
  19. 19. TV Spot This is quite to my taste
  20. 20. TV Spot Nestle LC 1 for daily consumption with health plus
  21. 21. Print Media <ul><li>Give a scientific appearance </li></ul><ul><li>Explain the concept of probiotic </li></ul><ul><li>Hedgehog was part of the ad </li></ul>

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