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Infant formula products

Founded in 1866 by Henri Nestle, Nestle started its corporation based upon milk and infant formula products. These products created a reputation for Nestle as a company interested in developing products for young children, and from this development Nestle became a household name. Further innovations and products were developed based upon this name recognition. Acknowledged as an ever-growing and expanding company, Nestle has emphasized that its marketing department is solely responsible for developing and creating new food items which would be easily accepted by the general market.

Seeking to overcome the competition, Nestle used its innovative products to gain a new foothold in the marketplace. With over 150 years of competitive and pioneering of new products, Nestle was among the first to introduce frozen food items into an eagerly accepting society. Currently it is the world’s #1 company in coffee. (www. zacks. com) Prior to frozen foods, the United States marketplace was forced into only purchasing meat, and veggies fresh in grocery stores. This made it especially difficult on busy households which did not have as much time to spend cooking various food items from scratch.

Though the introduction of frozen food items, Nestle hit it big with consumers who were satisfied

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with saving time preparing meals with less time spent in the kitchen. Basically, it all boiled down to: frozen items saved the average busy American time putting food on the table. Nestle’s research indicated that more variety would give the company an added boost in revenue and spread its reputation throughout more households. Via the introduction of frozen foods, Americans saw how convenient and efficient such variety of frozen food items could be.

In 1987, refrigerated foods were seen as responsible for 7% of Nestle’s global sales. In 1987, seeing such a rapid revenue increase, Nestle was able to purchase for $56 million it’s major competitor, Lambert’s Pasta and Cheese, which was operating at only $15 million. This acquisition was a positive spin for Nestle, who was able to acquire a significant new customer base. The pastas and sauces that its competitor had been creating was highly regarded by its customers and Nestle prized this new investment.

Because of this new investment and new marketplace, Nestle decided to retain BASES to conduct a BASES study. The objective of a BASES study is to ascertain how the customer sees the company and to help gauge the current customer awareness levels. Via market research, Nestle conducted many 1st year trial and repeat volume tests in the marketplace. This research indicated that there was an almost 75% positive purchase levels from the customers compared to the industrial benchmark of 80%.

Furthermore, Nestle had $25 million in expenditures which comprised of $13 million of advertising expense and $6. 2 million in consumers promotion for the capturing of marketshare. Nestle supported its product launch with $7 million advertising campaign. In addition, the research tactic of BASES used a technique called PAS which helped Nestle to better understand how to position their brand in the new market. Nestle also used a Multivariate research technique called “Factor Analysis” to reduce the major criteria by the customers for differentiating brand of pasta.

Because Nestle’s chief goal was to build up it’s refrigerated foods, it needed to see how it could distribute the items successfully. Nestle distribution is very efficient and highly effective. An order is placed with Nestle’s customer services line, it is then forwarded to the factory in Danville for production. In 1990, Nestle saw that pizza was being serviced and delivered by the nationally recognized Pizza Huts and Domino’s pizza companies. These companies delivered fresh pizza, and Nestle would need to overcome this competitive edge with its frozen pizzas.

Via the research it conducted, Nestle’s marketing division believed that the Contadina Pasta consumers represented 24% of the target market. the delivered market for Pizza was served by a large national franchisors such as Pizza Hut and Domino’s. With this market threat Nestle introduced its Froze Pizza into the market. So in 1990 research aiming to study its pizza products, Nestle conducted a BASES II line extension study for its home product line items to determine what additional products it could introduce and how consumers were receiving the current products. (www. businesswire. com)

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