Responding to changing customer requirements: the drive towards Wellness

01_Introduction When millions of people decide to change their lifestyle and their
buying habits market-led companies are certain to notice and to
Consumer research shows that people are looking to adopt respond. This is because their ability to stay in business depends on
healthier lifestyles. Newspapers and television channels bombard providing goods and services that meet customers needs and to
us with health information and messages about the benefits of respond to changing
healthier living. Governments, keen to ensure that people are requirements.
looking after their health in order to ease the burden on public
health services, are also reinforcing these messages. As a result, Nestl is the worlds
many people are taking positive steps to lead healthier lives. They biggest food and
are starting to take appropriate exercise; to find ways of relaxing beverage company
and to eat a balanced, nutritious diet. and produces a wide
range of products.
Many of its best
known brands are
Market led companies
household names,
although you may
perhaps not realise,
identify social trends and changing buying patterns and that some of them
respond by providing appropriate products that meet
customer requirements are part of the Nestl
portfolio.
The Nestl organisation operates through product divisions. These This Case Study focuses on how Nestl, one of the worlds leaders
include: in consumer-led approaches to product development, continually
seeks to provide products that meet consumers changing
requirements. In particular, it also looks at how Nestl use its vast
Food e.g. pasta scientific and consumer knowledge to make products that make it
main meals easier for consumers to be healthier.
Beverage Water

02_Responding to market demands

Chilled Dairy A market led company like Nestl is continually monitoring
Milk Products
customer attitudes and requirements through market research. This
Nestl research takes two main forms:
Qualitative research. This involves setting up small focus
Cereals Pet Foods
groups of consumers who express their ideas and opinions about
their needs and views on different products. At one level, this
Clinical Nutritional/ might involve asking groups of athletes to talk about their
Confectionery Performance
Healthcare lifestyles, dietary habits and training regimes. At another level, it
Infant Nutrition could involve a consumer focus group discussing the quality of
the nutritional labelling on a yoghurt drink.

You will be familiar with many of the brands, which include Quantitative research. Whereas qualitative research involves
Nescaf (coffee) only relatively few people, quantitative research involves much
Smarties, KitKat (confectionery) bigger numbers. For example, professional market researchers
Perrier, Buxton (water) may interview thousands of people through postal or telephone
Buitoni (pasta) interviewing.
Sveltesse (chilled dairy)
Shredded Wheat (cereals).

Henri Nestl developed the first infant

food in 1867 to save the life of a
friends baby who could not be
breastfed. Since then, the company
has looked to build on a tradition of
providing nutritious products. It builds
its business around:
discovering what customers want
identifying pressures for change e.g. government campaigns,
health education initiatives
responding to changes in the market place.

Today, in Lausanne (Switzerland), Nestl operates the worlds largest

nutrition based science research unit. Over 600 scientists and food
technicians work there developing and improving products.

Nestl regularly uses both forms of research to gain a clear idea of

consumer opinions and trends. Market research helps the company
to keep in touch with an ever changing environment in which
social attitudes and buying patterns are continually shifting.

Nestls market researchers do not work in isolation. They liaise

closely with the companys product developers, food scientists and
technologists. In this way the company can design products to
meet market needs.

Nestl spends more on Research and Development (R&D)

than any other company in the food industry. It is constantly
looking at ways to improve its products.
 Nestls development of a strategy to promote Wellness is an
evolution of the companys original commitment to nutrition and
Nestls product development
health.

involves
1867

using market research to discover what consumers Combined withHenri

science
Nestl
and technology
develops an
in infant
a research
foodbased company
want and promoting collaboration between

Ongoing development of nutritious products

product marketing food science &

development technology research
Market research becomes the heart of new product development

to create products consumers want

Combined with science and technology in a research based company

Using this market-led approach, Nestl introduced and developed

its Sveltesse (slimness or elegance in French) range. The range 2001
began with yoghurts and dairy products and globally now includes
bottled water, ice cream, cereal bars and frozen prepared meals. The Chief Executive emphasises Nestls move to becoming
a Nutrition, Health and Wellness company
In developing Sveltesse, the emphasis is concentrating on an
appealing taste combined with a low or no fat, low calorie option. 04_Ensuring strategic fit
03_Strategic development An Environment, Value and Resources (EVR) fit is a simple but useful
business tool to decide whether a proposed strategy is appropriate.
A strategy is the means by which an organisation achieves
particular ends. An agreed strategy answers the question By what
means are we going to achieve our objective?. For example,
Environment
Nestls market research confirms that increasing numbers of
consumers want to buy good tasting foods that can allow them to
have healthier diets. Nestl is keen to capture a greater share of this Resources FIT Value
growing market. So Nestl's ongoing strategy is to develop a
Wellness approach that builds on its tradition of producing
nutritional products.
The strategy the business chooses must match these three elements.
Wellness is a condition of enhanced health, a physical state which
is maintained by good diet, exercise and life habits. Wellness is For example, Nestls Wellness strategy must:
also associated with a feeling of vitality and being in good shape. E Match the strategy to the prevailing Environment, in which the
business operates. In this case, it is a social environment, in
which consumers are seeking nutritional products to
What the company complement a healthy lifestyle.
is seeking to achieve Meet customer
(the end purpose) Objective requirements
V Ensure the strategy is consistent with the organisations Values.
The means that the Nestl worldwide adheres to a set of business principles that
company employs to have long underpinned the way the company operates. One key
achieve the desired Strategy Promote Wellness
results (the plan) principle is that of meeting consumers needs for nutrition,
enjoyment and quality they can trust. This is why the company
places so much emphasis on market research and on the best
In 2001, Nestls Chief Executive set out the companys vision ways to communicate with customers. Principles that underpin
when he stated: We want to grow from the respected and consumer communication include:
trustworthy food company that we are known as now, into a stressing moderation in food consumption
respected and trustworthy food, nutrition and Wellness company. depicting children in healthy, energetic pursuits.
Nestl is clear, for example, that its advertising must not look to As the Wellness approach is now central to everything that Nestl
encourage children to eat snack foods instead of meals. does, the company has set up a Strategic Wellness Unit. Its job is
to promote the Wellness approach both internally and outside the
R Ensure the company has the necessary Resources to support organisation, so that everyone knows what it means and how to
the strategy. With its science and technology base, Nestl is well implement it.
equipped to develop the required science-based improvements
to existing products. It can also handle the development of new 06_Conclusion
products that contribute to Wellness.
Consumer interest in the nutritional quality and health impact of
Personal health and Wellness are powerful, universal, human foods has probably never been greater and for good reason.
needs. With its strong brands, wide product portfolio and R&D Governments have been busy spreading the message that healthy
competence, Nestl is well positioned to benefit from a growing foods and a balanced diet are vital for good physical and mental
market. It has the values and the resources to meet customer health and a general feeling of Wellness.
requirements in an environment in which more and more people
are seeking health and Wellness. Nestl is one of the worlds leading food companies and intends to
remain so. Its commitment to high quality market research ensures
05_Implementing the strategy that it remains fully aware of changes in consumer behaviour and
consumer tastes. Its excellent product research and development
Having developed a clear strategy, it is important to implement it. network ensures that it is well placed to meet the challenge of
Nestl will look to ensure that going forward all its products retain a changes in consumer expectations. The companys Wellness
superior taste profile while providing enhanced nutritional benefits. strategy is carefully geared to delivering to customers what they
now clearly want in relation to the foods they eat; a high nutritional
This will involve: value and a positive contribution to their general Wellness.
i. retain certain products
ii. product reformulations (including salt, sugar, fat reduction)
iii. launching new products with scientifically proven nutritional Glossary
benefits. Nestls product research and development network Brands: Products or firms whose names and/or logos are
ensures it is well placed to meet the challenge of changes in readily recognised and associated with particular
consumer expectations. The Companys Wellness strategy is characteristics e.g. KitKat.
carefully geared to delivering what consumers want in relation Environment: The context in which a business operates,
to the foods they eat a high nutritional value and a positive including all the factors outside its control e.g. new laws
contribution to their general wellness. introduced.
Market-led: A company that sets out to identify and then
This has led to the following three-part strategy: meet customer requirements.
Product divisions: The separate organisational and
administrative units, into which a large company may divide itself,
3. Develop and produce with each unit looking after a particular range of products.
innovative products that 1. Retain already healthy
meet Wellness criteria products e.g. Shredded Wheat Qualitative research: Market research based on small
e.g. Clinutren, Fitnesse, Sveltesse
numbers of participants, who are asked for their opinions and
views of particular products or ideas.
2. Improve existing products
e.g. salt reduction in cereals and soups Quantitative research: Research that involves larger
samples of consumers to gain a feel for views and opinions in
the wider market.
Clinutren has been formulated for patients with increased energy Research and Development: Processes that involve
and protein requirements and supports the nutrition of people investigating new ideas for products and taking them forward
to be test marketed.
suffering from a series of medical conditions or recovering from
operations. Fitnesse is a 99% fat free cereal. Sveltesse is a range of Resources: The things that are available to an organisation
low or fat-free products (e.g. yoghurt and fromage frais). for it to use.
Strategy: An overall plan to achieve business objectives.
Using this approach, over the past five years Nestl has developed
or reformulated over 700 products so that they have a lower fat, Values: What an organisation stands for. The ideals that it
holds dear and which determine how it acts and operates.
sugar and salt content.

In addition, the Company looks to educate consumers about

healthy lifestyles and proper nutrition. Its initiatives include: For more information about Nestl
the Nestl Trust supporting a number of initiatives focused on please browse:
developing nutritional awareness, often these are aimed at young
people [Link]
a website focused on providing nutritional information
on-pack nutrition information.