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A Tale of Two Marketing Campaigns
Unilever vs NestleCase Study
Marketing problems
• Unilever– “impulse” (or stick) ice-cream category– Accounts 22 percent of total sales – Recorded sluggish growth of 2 percent over the
past year
Consumer behaviour
• Unilever’s insight on consumer behaviour– People have a dual desire to treat themselves
more nutritionally and treat themselves more indulgently
Marketing performance
• Whenever Unilever push premium indulgence products or push health and nutrition, they get a tremendous reaction in the marketplace
Ice-cream market
• $1.8 billion market• Nestle’s Peters division and
Unilever’s Streets division accounts for about 50 percent of the market
• Market grew about 3.5 percent over the past year, up slightly from its average annual growth rate of about 2.5 percent over the past five years
Ice-cream market
• People switching to healthier products
• Fall in milk production because of the drought
• Healthier ice-cream products getting popular
Unilever’s marketing objectives
• Boost the company’s share of the “impulse” (or stick) ice-cream category (Cornetto, Drumstick, Paddle Pop, Heart etc)
• Boost sales of multi-pack versions of the four brands
• Take on Nestle’s Drumstick brand, which has 70 percent of sales
Unilever’s marketing objectives
• Revive sales of Paddle Pop, which fell in a hole two years ago when Unilever slashed its fat content and tried to promote it on a health platform
Unilever’s strategy
• Devoting $25 million to its summer ice-cream marketing budget
• Ads pushing new versions of key products such as Magnum, Cornetto, Paddle Pop and Calippo
Unilever’s strategy
• Half of its budget spent on the Internet and other non-television media
• Shifting money away from traditional media
Unilever’s strategy
• At the premium end of the market, Continue to focus on the “indulgence” positioning of Magnum
• Introduce new variants and a TV and online ad campaign that offers free “gold class” movie tickets with every product
Unilever’s strategy
• For the healthier ice-block brand Calippo, added fruit gelato variants to give the brand a more premium positioning
• Revive a new version of the “Lick-a-price” promotion for Paddle Pop after a five-year absence
Unilever’s strategy
• In the cone category, changed the formulation of its Cornetto product – adding more nuts and sauce – to take on Nestle’s Drumstick brand, which has 70 percent of sales
Nestle’s marketing strategy
• Part of its 2007-08 summer strategy involves bringing in products outside the ice-cream market
• For example, it hopes to tap into the booming ice tea market
• Ice-cream and confectionery division to work closely together
New products
• Iced-tea flavoured frozen water ice product
• Kit Kat branded cone product
Two different strategies
• Unilever– Promotions– Positioning– Innovate products
• Nestle– Add new product
ranges
Lesson learned
• Unilever– It is perilous to remove the flavour and
indulgence qualities of products
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