CHAPTER 6 * GLOBAL INFORMATION SYSTEMS AND MARKET RESEARCH 217 CASE 6-1 conriNuEn (REFER TO PAGE 188) Nestlé’s Middle East Investment in Market Research Jn2222 Nese wie Essa revenue rom ange o 60 pros | Stacton of the nade of snares fom “emesing consum- cts, as mentioned earl, accounted for $1.4 billion. Nestlé gains consumer trust not only by considering serious concerns over the quality of food and the varity it serves to its consumers, but also by Investing in research labs to ensure they exceed the food safety quality requirements. Nestlé Middle Eat isan important market globally, and has been identified as @ potential growth market with a lot of oppor- tunities. In 2009, Nestlé state-of-the-art Regional Microbiological Laboratory located in Dubai, United Arab Emirates became well- known for carying out a wide range of tests forthe analysis of sal- ‘monella. The new faclty is also used for training several government bodies. Another recent investment i the advanced Sensory Lab Unit {or Renovation-Innavation of Products (SLURP), also located in Duba This lab is fitted with high-end technological facilities to serve as & center of expertise for advanced sensory profiling analyses on shelf- Stable dairy coffee and confectionery products. Nestlé alieves investing in factories is very important because they ‘support and faciitate research in various ways. Manufacturing prod- cts locally allows Nestlé to adapt to the cultural needs and prefer- ences of the local market, and accelerate the delivery of fresher prod- cts to the market and the consumer. Thus, new information gathered from the market can be implemented effectively in a timely manner According to Nestle, doing so gives them a prime advantage over their competition, a practice they have followed for many of ther manufac- turing plants in the Middle East n 2010, Nestlé announced its com mitment to investing US. $136 million in anew manufacturing facility in Dubai aiming to serve Nesté markets across the region. in addition, ‘nother investment to expand operations in the Midale East to meet the growing regional demand and eventualy export to other regions is in the pipelines ~ Nestlé Midale East bult anew Nestlé confectionery factory whichis set to be the thi largest Kitkat plant worldwide. ‘The UAE is not the only country where Nestéis interested in Investing, In 2010, Nesté created the first and only factory outside Europe for the production of Movenpick Super Premium ice cream in Egypt. It will also be a base for products such as Cereac infant cereal and Maggi soups and bouillons. Nestlé believes that Eqypt— with a large population, diverse and energetic, of $0 milion—s a ‘00d market. The ice cream produced is distributed locally as well 4&5 exported to countries like Jordan, Libya, Lebanon, and Tunisia and ‘Malaysia. n future, mixing, processing, chocolate-coating and cone- filing equipment will be added tothe factory. Nestle continues to expand in the emerging markets and is cur- rently using a Popularly Positioned Products (PPP) model as a growth diver for the region. For targeting emerging consumers who are entering the cash economy and buying branded goods for the first time, Nestl’s PPPs are adapted to meet their needs in terms of price, ‘accessibility and format, such as single-serve packets. In Egypt, Nestlé’ research conducted on behalf of the food service industry 's applied to Nestlé Professional strenathening ~ since consumption ‘on-the-go and hence, out-of-home is steadily on the rise, there is scope for developing Nestle’s coffee machine vending business, 5 to those looking for premium products,” isthe topmost priority and Nestlé aims to fil this gap. The Egyptian Revolution, aso known as the Revolution of January 25th, did not stop Nestlé investment, ' week after the uprising it publicized @ $160-millon program for improvements across its manufacturing and distribution, and invest- ‘ment in skis over the next three to five years. Nestlé Egypt aims to attract and adapt to the cultural change in an innovative way ~ for instance, a new nutttion initiative called the “Healthy Kids" program aims to engage the target audience in the company's identity It is an educational scheme with almost 30,000 children in $0 secondary schools around Egypt. Finally, to emphasize the importance of marketing research, Nestié is very keen on understanding the nutritional needs of its consumers so as to accelerate the development of products with an improved nutrition profile atthe right price in emerging mar- kets. For example, in South Africa, a new research partnership with South African scientists is being coardinated by the Council for Scientific and Industrial Research (CSIR), a part of the govern- rment’s Department for Science and Technology (DST). It will allow scientists to explore and make use extensively of Nestlé’ research Capabilities and expertise in nutrition, food science and food safety ‘Moreover, part of Nestle's global R&D efforts focuses an discovering new bioactive ingredients. Biodiversity s very important; some of the researches will work on studying how to make use of the locally sourced ingredients to create foods that provide health benefits. Researchers would examine “how well these ingredients target dif- ferent tissues in the body ance ingested, as well as their effectiveness in helping to promote heath.” Discussion Questions 6-10. Crtal examine Nestle’ postoning mode 6-11. Discuss the importance of investment in research with regards to the Nest case. 6-12. Explain the diferent ways in which market research can be applied to satisfy consumers. ‘Source: A word rm the Chiman and CEO, Nestlé Mile East, waenesteme comveniabouts; Fact Sheet, Nestlé Mile East 2010), vaste corvasset- Toren/Decumentsubra/Events200snevgurstion-oF-neurfactoryin-Duba! 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