Nestle Aims for Global Growth Using a Local Marketing Approach

For all Nestle's global reach, Brabeck dismisses the idea of global brands. "We believe there is no such thing as a global consumer, especially in a sector as psychologically and culturally loaded as food." As a result, Nestle retains its brand strength by using local brands, such as Rolo in the U.K. or the Rossyia confectionary range in Russia. Moreover, product formulations also vary from market to market to reflect local tastes. "Every single day, billions of customers have to make the choice to pick our [products]," he says. "This means having a local character." For this reason, he dismisses the notion of global advertising. "Yes, we tried once to make a global Nescafe campaign. On paper it was efficient, but it was a flop. Either they are not relevant or they are offensive."

The measure of marketing success will be whether Nestle can deliver its stated goal of 5 to 6 percent growth over the next decade. Brabeck sees the target as realistic, even in a mature market. "There are no mature markets, only mature managers," he says. The question is, What is the next driver of growth going to be? "It is my conviction that the next value creation, and it will be huge, is going to be nutritional aspects. That is what allows you to ask 40 percent more for a product."

Foods with medical benefits, known as "functional foods" or "nutraceuticals," are expected to be the big growth source for the next 15 to 20 years. After that, the company is looking to the area of "well-being" and already has established a joint venture with L'Oreal (itself 26 percent owned by Nestle) to develop nutritional products with a cosmetic effect.

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