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Group 3

Nestle S.A.: International Marketing
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CEO’s Dilemma Centralization or decentralization  Coordinated or Directed marketing policies from Centre to local  Degree of influence over the local markets  Whether Co-ordination by centre is more feasible &productive for v Some elements of Marketing Mix over others? v Some Product Categories over other? v Some Countries over Other?  8/9/12 .

Benefits of Centralization and Decentralization Centralization Easier Management Sharing of Best practices across the countries Reducing cost through economies of scale Decentralization Better understanding of local business New product ideas customized for local markets Concentrated marketing specific to local customers 8/9/12 .

• 8/9/12 . • Product Positioning. standardized by central organization who charge license fees to country operating companies for the use of brands and brand names.How does Nestle exert Influence Flexibility given to regional and country managers on every elements of marketing mix. Trade Promotion.Consumer Protection and Media advertising decentralized. except Branding. Distribution. • Branding is controlled.

  Marketing Strategy Product Positioning Product Characterisitics Branding Packaging Distribution Trade Promotion Consumet Promotion Media Advertising No HQ Initiative   Y     Y Y Y Y Y HQ promotes cross-fertilization among countries   Y     Y Y Y Y   HQ persuasion for HQ decision standardization making Y   Y           Y Y   Y Y           HQ enforced standardization       Y           HQ decision making and No HQ initiative will be retained as primary function and others would be secondary function. 8/9/12 .

8/9/12 . Decision on Centralization is contextual and dependent on the extent of achievable economies of Scale.Degree of Centralization  Based ◦ ◦ on Product Country Marketing based on the regional needs Existing infrastructure  Product ◦ category  Based on Marketing mixPrice  Pricing objective Price customization Price points are sensitive to local market competition. consumer’s purchasing power and brand value.

length and depth all aligned to local market needs. Eg. depends on consumer demand.Instant noodles.Contd… ◦ Product New product development depends on the local market needs and taste Product line breadth. 8/9/12 . Product needs to be with lesser degree of centralization as product development.

This needs be of equal balance ie between centralization and decentralization. Promotion should target regional needs. Once the strategy is deviced. Use marketing knowledge from different markets. the communication mix is constructed accordingly.Contd… ◦ Place : Place needs to be decentralized for proper operation Eg – Germany and France ◦ Promotion Tasks and tools vary from target market to another. 8/9/12 .

Over National Boundaries 8/9/12   Spill . away from food consumption and standard of living. Population growth .Points to be considered before deciding on feasibility of centralization:  Cross Cultural Understanding between different Countries and cultural Trends  Demographic  Consumer  Family Tastes and Preferences size.

 But the HQ should posses the necessary command on Product and aid in coordination  Effective communication between HQ and regional divisions ◦ ◦ Sharing of best practices Brand logos.Conclusion  Nestle needs to take a more decentralized approach. Quality as a part of standardization 8/9/12 .

Thank You 8/9/12 .