Nestles Multidomestic Strategy

Germany

Switz.

France

U.S.
 Nestle 1983 Structure
HQ

P r o d u c t D ir . M a r k e tin g S v c .

L a rg e C o u n try M a n a g e r S m a ll C o u n tr y M a n a g e r

P r o d u c tio n M g r .
F in a n c ia l M g r .
M a r k e tin g M g r .
P r o d u c tio n M g r .
P ro d u c t 1 M g r. P ro d u c t 2 M g r.
F in a n c ia l M g r .
M a r k e tin g M g r .
 Marketing Activities
 Strategy: Multidomestic vs. Global
– How standardized or localized should the
marketing program be?
 HQ Influence
– What is appropriate level of HQ intervention in
decision making – degree of “centralization”??
 Centralization and Standardization

The extent to The extent to

Centralized which activities which activities
are the same are differentiated
HQ Influence across national across national
units. units.
Decentralized
Forces? Forces?

Standardized Localized
Strategy
 Product Names
 Coca-Cola in Chinese: “Bite the wax tadpole”
 Castlemain XXXX lager in US: “Fourex
(condoms)”
 Olympia ROTO copiers in Chile: “broken” or
“low-class”
 Marketing
 In India it’s the Taj Mahal (a mausoleum); in
New York it’s the Helmsley Palace
 United Airlines ad in Australia: Crocodile
Dundee camps it up (…means Dundee flaunts
his homosexuality)
 Guinness is good for you ...attracts pregnant
women as key customers
 Centralization and Standardization
The degree to which HQ has
decision-making authority.
Centralized
Forces for centralization??
HQ Influence
The degree to which each country
has decision-making authority.
Decentralized

Forces for de-centralization??

Standardized Localized
Strategy
 Levels of HQ Influence
Directing

Approving

Coordinating

Persuading

Informing

Ignoring
 Nestles Marketing Integration

Branding
Centralized Packaging Price
Product
HQ Influence Advert.

Decentralized ? Promo.

Standardized Localized
Strategy
 Managerial Roles
 Product Manager
– Strategist, architect, coordinator
 Country Manager
– Sensor, builder, contributor
 Functional Manager
– Specialist, cross-pollinator
Nestles’ New Marketing Structure
N e s tle H Q

P r o d u c t P o s itio n B r a n d in g /L o g o

P a c k a g in g P r ic in g

US F ra n c e Ita ly G e rm a n y

A d v e r tis in g A d v e r tis in g A d v e r tis in g A d v e r tis in g

Channel Channel Channel Channel