nestle lc1 presentation

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Managing Internal Growth and Nestle: The Story of LC 1 Presented by: Diana Lim

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nesle lc1 yogurt

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Page 1: Nestle lc1 presentation

Managing Internal Growth and Nestle:The Story of LC1

Presented by:Diana Lim

Page 2: Nestle lc1 presentation

The Company

Founded 1866 in Switzerland as an infant nutrition company

480 factories 276,050 employees

worldwide business volume in 2006

over $ 100 billion

Page 3: Nestle lc1 presentation

Business Strategy

Encourage product growth through innovation and renovation

Internal growth strategy• Develop new products

• Renovate existing ones

Develop innovative ideas transform ideas into successful products

Page 4: Nestle lc1 presentation

Internal Growth Drivers

4 pillars for would drive Nestle’s internal growth worldwide as identified by Peter Brabeck (CEO)

Operating Excellence

Innovation and Renovation

Product Availability

Communication

Page 5: Nestle lc1 presentation

The Story of LC1

research team in Switzerland discovered a culture called Lactobacillus acidophilus, or La-1

contains a probiotic agent, which is living microbial feeding supplements that allow the lower intestine to function better

No immediate plan to introduce in into yogurt

Page 6: Nestle lc1 presentation

The Story of LC1

James Gallagher – European coordinator for chilled products

Andrea Pfeifer – leading scientist at the Research Centre

Create a new segment on the yogurt market

Position itself as a functional food

Page 7: Nestle lc1 presentation

Launch of LC1 in France

Launched 1994 Not the success that Nestle had hoped Reasons:

• LC1 arrived late; Danone already in the market

• Consumers didn’t believe it tasted better than other yogurts

• Purchased based on claims; decision not to repurchase was based on taste

• Too scientific to understand benefits

Page 8: Nestle lc1 presentation

Failure

Danone’s Actimel Japan’s Yakult Both have outsold LC1

LC1 failed in France and UK – delisted LC1 Go!: introduced 1998 pulled out 2000 Nestle Brand – associated with Ice cream and

indulgent desserts Marketing Strategy

Page 9: Nestle lc1 presentation

Launch of LC1 in Germany

Launched in 1995 Highly successful in Germany

• No clear market leader in Germany

• Yogurts that made health-based claims were new to the market (differentiation)

• German consumers preferred the taste of LC1

Page 10: Nestle lc1 presentation

SWOT Analysis

Strengths Weakness

Strong R&D Team/ food science Late entry into market

Low cost operator Positioned as too scientific

Opportunities Threats

Health consciousness Mature markets

Introduce more health-based products in Germany

Intense competition

Page 11: Nestle lc1 presentation

Reflecting on the Success of LC1

Understand technical ideas transform into marketing ideas

R&D process people must talk to business people early on in the process

Think of product concepts: “where could this scientific finding be possibly used?”

Led to the creation of Nutrition division in 1997

Restructured compensation package

Page 12: Nestle lc1 presentation

Nestle’s campaign for LC1

First probiotic yogurt

Supports the body’s defenses

Special name

Special design

Page 13: Nestle lc1 presentation

TV Spot

A hedgehog was introduced as a key visual

He has his spikes

Page 14: Nestle lc1 presentation

TV Spot

We haven’t

Page 15: Nestle lc1 presentation

TV Spot

That’s the reason why I help my body with health

food

Page 16: Nestle lc1 presentation

TV Spot

Everyday

Page 17: Nestle lc1 presentation

TV Spot

With this special milk

ferment

Page 18: Nestle lc1 presentation

TV Spot

It’s good for my body’s

defenses

Page 19: Nestle lc1 presentation

TV Spot

This is quite to my

taste

Page 20: Nestle lc1 presentation

TV Spot

Nestle LC1 for daily

consumption with health

plus

Page 21: Nestle lc1 presentation

Print Media

Give a scientific appearance Explain the concept of probiotic Hedgehog was part of the ad