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