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Nestle to apply Russian marketing techniques to Europe

Posted by Editor on Wednesday, 22 September 2010 09:19 | Published in Retail & Consumer Goods

Nestle, the world's largest food and confectionary company is to apply sales and packaging techniques pioneered in emerging markets like Russia and Malaysia to western European markets such as Greece and the UK. Customers in more established markets are feeling the pinch as governments apply austerity budgets and Nestle is trying to maintain sales in the face of tighter consumer spending.

In the UK Nescafé is launching the three-in-one sachet containing coffee, whitener and sugar familiar in stores in Russia, Malysia and other markets in an attempt to attract younger consumers to the instant coffee category.

The late September launch of Nescafé Original 3-in-1 and will begin in the next few weeks. Billington Cartmell, Dare and EHS 4D also work on the Nescafé advertising accountis already being advertised.

In emerging markets Nestle  sells many of its best-known products, such as Nescafé coffee, in smaller packs or in more budget conscious “refill” containers. The aim is to create brand familiarity and loyalty among a wider group of buyers than just the affluent middle and upper classes.

Known in industry jargon as popularly positioned products (PPP), they were pioneered in Asia and parts of South America but are now being rolled out in Europe because customers have become much more price sensitive, according to Laurent Freixe, Nestlé’s head of Europe.

He said: “If you look at Spain or Greece, consumers have turned much more price conscious. This is a challenge for the brands. PPP is also valid for west European markets”.

He highlighted Spain, where Nestlé had altered packaging and quantities to reduce prices and retain customer loyalty, even when they had less to spend.

Among Nestlé’s local measures have been selling its new Maggi cook-in bags – cellophane wrappers for roasts which prevent oven soiling and come with pre-packaged sauce and spicing – in single units for less than €1 ($1.31) each, rather than in multiple packages. The concept was developed in Russia.

Other recession-busting initiatives include tailoring products and packaging to the specific needs of target groups, such as youngsters, pensioners or immigrants.

Nestle to apply Russian marketing techniques to Europe