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