Nestle's Brand Management Strategies

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Case Details:

Case Code : MKTG039
Case Length : 10 Pages
Period : 1990 - 2002
Pub Date : 2002
Teaching Note : Available
Organization : Nestle SA (Nestle)
Industry : Chocolates and Confectionery
Countries : Switzerland

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Background Note

In the mid-1860s, Henri Nestle (Henri), a merchant, chemist, and innovator experimented with various combinations of cow's milk, wheat flour and sugar. The resulting product was meant to be a source of infant nutrition for mothers who were unable to breast-feed their children.

In 1867, his formula saved the life of a prematurely born infant. Later that year, production of the formula, named Farine Lactee Nestle, began in Vevey, and the Nestle Company was formed. Henri wanted to develop his own brands and decided to avoid the easier route of becoming a private label. He also wanted to make his company a global company.

Marketing Management Case Studies | Case Study in Management, Operations, Strategies, Marketing Management, Case Studies

Within a few months of establishing his company, Henri began to sell his products in many European countries. In the initial years, Henri restructured the organization to facilitate research, improve product quality, and develop new products. In 1875, Daniel Peter, Henri's friend and neighbor, developed milk chocolate.

He soon became the world's leading chocolate maker. Later, his company was acquired by Nestle. In 1905, Nestle merged with Anglo-Swiss Condensed Milk Company, a manufacturer of milk-based infant food.

During World War I, there was a huge demand for dairy products and Nestle capitalized on this opportunity by executing military contracts of various countries involved in the war.

In 1938, after eight years of research, Nestle discovered a soluble powder that revolutionized coffee drinking around the world. The product was launched under the brand name Nescafe and became an instant success.

The end of the World War II marked the beginning of a new phase of growth for Nestle. The company added many new products. In its effort to expand its operations further, Nestle merged or acquired several companies. In 1947, Nestle expanded into culinary products by merging with Alimentana, a Swiss company that produced and sold Maggi soups, spices and other food products in many countries...

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