Marketing Research

Source of Volume

This is an important issue for Nestlè's Marketers because they have to choose, from a wide range of activities, where the purchases come from. They should take into account all the variables on which the can act, manipulating at the most the internal ones, limiting the effect of the externals which can not be manipulated.

First of all, we should define the Category on which they act, keeping in mind that it changes easily due to the continuous changes of the consumer needs and perception. They can also act on the elements that tie the category together, creating new categories where new strategies are more likely to be enacted.

For Nestlè's LC1 project the category was already set by the previous Firms that came first into the pro-biotic yoghurt sector. This category was the one coming from to the fast-growing demand for single-dose bottles of live, friendly bacteria that help the body's digestive system. So we can define it as Healthy/Body friendly drinks easy to carry and helpful for the digestion.

Introducing a proper product in an already set market category (the market was born in the 1996 in UK with the arrival of a Japanese brand called Yakult), Nestlè's Marketers where forced to purse a STEAL SHARE strategy, because when the got into the sector there was already a market leader (Yakult), and also new comer was coming soon together with LC1, in facts during 1998 the market was enlarged with the launch of Actimel by Danone and Nestlè LC1.

The missed position of category leader and the hard challenge to create a new segment gave a marginal role to Nestlè LC1, the market was almost mature, in facts after few months Danone became the market leader benefiting from its established leadership position in the general yogurt market, and for this consumers were used to Danone's yogurt taste. Some other consumer didn't believe it tasted better than other yogurts. Another factor that influenced to impossibility to reach the sector leader position was the advertising campaign heavily based on scientific results, which were hard to transmit to consumers.

The steal share strategy was enacted at the expense of Danone, in order to let consumers clearly understand which brands should be compared and also the cost/marketing benefits coming form the leverage of existing awareness. Nestlè created a Nutrition center, a global business organization designed to strengthen the focus on their core nutrition business, focusing on infant nutrition, healthcare nutrition and performance nutrition.

The steal share strategy so was clearly based on pushing those values and beliefs, which represent the cornerstones of Nestlé's success but also investing massively in R&D expenses, creating one of the most advanced firm in the food sector. Also important measures concerning the product were taken,