Commodity to Value Creation – The Transition

Marketing managers need to persuasively demonstrate to customers that their offering is

different in valuable ways, As said by B2B experts that ‘There is no such thing as commodity
market’ as all goods and services are differentiable. Every brand should focus on the product
differentiation to avoid the commoditization of their product this product differentiation will lead
to value creation for the product and also it will pave a path for growth of the company

Nestle UHT Milk Malaysia

Milk is a commoditized and a highly competitive product in the FMCG category and Nestle
Malaysia was facing issues with its challenges in regular UHT milk brand with single digit
market share and multiple international and local players. Though Nestle has a good quality
product it lacked to stand out in the shelf for the customers, to tackle this situation Nestle came
up with a product differentiation by changing its packaging which used to have a milk splash and
meadows, it came up with dark pink color for full cream milk and dark sky blue for low fat
milk, the shape of the bottle symbol also differs for both the variants.

This delivered immediate results for Nestle Malayasia with sales doubling in a month after the
relaunch and also market share went four folds in six months without any ATL activities
Managing Market offering-Nestle Maggi

Core product:

The fundamental product which provides a solution to a basic problem of a consumer

Example: Nestle Maggi Noodles

Minimally augmented Product:

Added to the core product Maggie Noodles, which is very important for the usage of the product

Example: Taste maker given inside the Maggie packet which is very essential to give a good
taste to Maggi

Augmented product:

Added to the core product Maggi Noodles, they came up with variants to meet wide range of
customers, to increase the market size and market

Example: They came up different masala variants, oats variant, and atta variant

Potential product :

Any value which can be added by the supplier/ Retailer to increase the value of the our core
product Maggi Noodles

Example: They came up with products such as Tomato sauce, Hot and sweet sauce and Imli
pichkoo sauce to enhance the value of the product
Relationship Spectrum:

The Relationship Spectrum can be analyzed in three different stages i.e. transactional exchange
where basic products are exchanged in highly competitive market price these usually seasonal
products and festival products and then there happens collaborative exchange in which close
information and operational linkages are exchanged to achieve mutual benefit and then value
added exchanges takes place where are requirements of the customers are taken into
consideration for the design of the product

Nestle Nescafé Strategy to build Relationship Spectrum with Organizations

To pull in new partners initially, Nescafé made a character test "What is the correct espresso for
your organization?" on a devoted smaller than normal site. Organizations were welcome to
participate in the test to find the espresso that suits them the best and attempt to win a tasting of
the espresso being referred to. To see the comparing espresso and approve their interest,
participants needed to fill a form with their contact details. They were likewise inquired as to
whether they accept to be contacted by a Nestle professional
Customer Profitability: Nestlé Schöller B2B online shop

Nestlé Schöller is a B2B market place for products such as ice-creams, frozen meals and frozen
baked goods, as this site aims to maintain a good long term relationship with the B2B players it
has to come up with different recommendations strategy from the conventional B2C market
place for which it designed a new algorithm which gives recommendations which leads to cross
selling and up selling of the products and this leads to greater customer life time value and
customer profitability. This new recommendation algorithm also helped them to analyze
customer buying patterns and to provide personalized news letter’s based on their purchase
history.