NESTLÉ - ON TOP OF
THE MARKET
What's NewS Issue 5 May 1996
working relations
3
As the world's top food-processing multinational, Nestlé needs no
introduction.The Swiss giant has long been a global household name.
Each of Nestlé's operations in 71 countries is semi-independent. 'This
means we can focus strongly on our local markets,' says Nestlé Nederland's
CEO Jacques Krielen. 'But what we all have in common is a corporate
philosophy based on the concept that the "consumer is king"
Nestlé has been in the Netherlands for so
long (sinee 1912), it is almost considered a
domestic company. Td say that certainly
applies to some of our products,' confirms
^^Crielen. The Maggi range, for example, is
so well and long-established here a lot of
people think it's a Dutch brand. Actually,
it's Swiss.' But marketing Nestlé's top food
products, ranging from the flagship
Nescafé brand, through ice-cream, candy,
dairy products, chilled and frozen items,
mineral water - Perrier was acquired in
1992 - and even pet food, is only one of
Nestlé Nederland's diverse activities. 'We
are the Group's top European dairy
production centre,' says Krielen,
'processing some 800 million kilograms of
Dutch milk alone into a wide variety of
products, such as baby food. None of
these products are destined for the
domestic market. And we are also the
world production centre for our top candy
bar, Nuts. We produce around 20,000
#ons, of which only 2,000 tons remain in
nis country.'
GROWING MARKET SHARE
While 70 percent of Nestlé Nederland's
more than NL.G 1.3 hillion (1994)
turnover is generated by export products,
the Dutch operation is clearly doing a lot
of business on its home market. 'Most of
our domestic turnover comes from the
Maggi range, Nescafé, Santa Rica coffee,
and our chocolate products - Quality
Street, After Eights, and, of
course, our top-selling candy
bars, KitKat, Nuts and Lion.'
Krielen is clearly very pleased
with the performance of all
three. 'Over the past few
years, we have managed to
doublé hoth KitKat and
^kion's market share,' he says,
^Knd they are now in the top-
10 sellers, along with Nuts. J
That growth has been
achieved by significant 1
investment in consumer I
research. We haven't actually changed
much about the product itself. But what
we have done is get even closer to the
consumer. In this business you live or die
through your closeness to consumers.'
CULTURAL REVOLUTION
The key to growing market share in this
particular area appears to be a successful
translation of indepth consumer research
into concrete marketing. 'Most of our
marketing people, including myself, spend
at least one day, and sometimes more,
every month with consumers,' Krielen
says. 'Knowing the consumer, knowing
what motivates hint, and how we can
create certain perceptions of our products
- that determines our success. In fact, I
believe marketing is one area where banks
can learn from the corporate experience.
We spend around 16 percent of our
turnover on communication with our
consumers, that includes advertising. If a
bank invests one-tenth of 1 percent, that's
a lot. Yet, the market is changing
dramatically. I think it's fair to say that 20
years ago, banks weren't really interested
in consumers. They were busy with cash
flows, lending, mortgages. But times have
changed. There's increasing competition,
and new technologies, like smart television
and Internet, mean changes in consumer
behaviours that will cause an absolute
cultural revolution in your industry.'
Jacques Krielen
ju
NESTLÉ
Nestlé, één van de
grootste voedselpro
ducenten ter wereld wijkt
af van de concurrentie: Nestlé Nederland
produceert met name voor de exportmarkt.
Volgens algemeen directeur Jacques Krielen
kunnen banken op marketinggebied nog
heel wat leren van het bedrijfsleven. De
beschikbare informatie, zoals eventuele
overnamekandidaten, sectorrapporten,
lokale fiscale know-how,etc. zouden actiever
bij de klant onder de aandacht moeten
worden gebracht. De nieuwe technologie en
toenemende concurrentie vraagt volgens
hem een nieuw soort bankiers.
ACTIVE MARKETING
According to Krielen, some banks have
come to this awareness and are actively
recruiting experienced marketing people.
'But I doubt you can name one bank
where the marketing director sits on the
executive board - it is still perceived as a
support department. I think that will have
to change in the future. You can't be
complacent. You have to be out there -
communicating with your consumers,
actively marketing your products.'
ADDING VALUE
There are also other areas where Krielen
feels banks could be more active from a
'consumer' perspective. While he believes
Rabobank has suceesstully marketed itself
as a specialized food and agribank, and
has created a niche in the market, he would
like to see rather more proactivity. 'You
don't only go to a bank for funding,' he
says. 'There is a certain expertise they have
which we can never have - fiscal, local
through their networks. But our experience
is that banks provide good service when
you call with a specific question or require-
ment. Let's just look at mergers and
aquisitions. What I would like to see from
a bank is an overview of potential
acquisition opportunities for Nestlé. A bank
could add value by alerting us to, say, a
good company where there may not be a
successor to the present
owner. Just take the Rabo
bank indepth sector studies.
They are very good and are
appreciated. Yet, having put
major investment into the
studies nothing appears to
be done with the results.
There is so much knowledge
in a bank - local, regional,
international. If you were
able to put all that information
together, now that would be
a real service for clients.'
