A Tale of Two Marketing Campaigns Unilever vs Nestle Case 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