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    Managing Internal Growth and Nestle:: The Story of LC

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    Diana Lim
    This document summarizes the story of Nestle's LC1 probiotic yogurt and its journey from conception to successful launch in Germany. Key points: - LC1 was discovered by Nestle researchers in Switzerland and contains the probiotic Lactobacillus acidophilus. - It initially failed to take off when launched in France in 1994 due to late market entry and being positioned too scientifically without focus on taste. - LC1 was highly successful when relaunched in Germany in 1995, as the market was less saturated and Germans preferred its taste over health claims alone. - Nestle analyzed what went wrong in France and made changes like involving R&D and marketing teams earlier in product development.

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    Managing Internal Growth and Nestle:: The Story of LC

    Uploaded by

    Diana Lim
    268 views21 pages
    This document summarizes the story of Nestle's LC1 probiotic yogurt and its journey from conception to successful launch in Germany. Key points: - LC1 was discovered by Nestle researchers in Switzerland and contains the probiotic Lactobacillus acidophilus. - It initially failed to take off when launched in France in 1994 due to late market entry and being positioned too scientifically without focus on taste. - LC1 was highly successful when relaunched in Germany in 1995, as the market was less saturated and Germans preferred its taste over health claims alone. - Nestle analyzed what went wrong in France and made changes like involving R&D and marketing teams earlier in product development.

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    Nestle LC1 Presentation

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    This document summarizes the story of Nestle's LC1 probiotic yogurt and its journey from conception to successful launch in Germany. Key points: - LC1 was discovered by Nestle researchers in Switzerland and contains the probiotic Lactobacillus acidophilus. - It initially failed to take off when launched in France in 1994 due to late market entry and being positioned too scientifically without focus on taste. - LC1 was highly successful when relaunched in Germany in 1995, as the market was less saturated and Germans preferred its taste over health claims alone. - Nestle analyzed what went wrong in France and made changes like involving R&D and marketing teams earlier in product development.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as ppt, pdf, or txt
    268 views21 pages

    Managing Internal Growth and Nestle:: The Story of LC

    Uploaded by

    Diana Lim
    This document summarizes the story of Nestle's LC1 probiotic yogurt and its journey from conception to successful launch in Germany. Key points: - LC1 was discovered by Nestle researchers in Switzerland and contains the probiotic Lactobacillus acidophilus. - It initially failed to take off when launched in France in 1994 due to late market entry and being positioned too scientifically without focus on taste. - LC1 was highly successful when relaunched in Germany in 1995, as the market was less saturated and Germans preferred its taste over health claims alone. - Nestle analyzed what went wrong in France and made changes like involving R&D and marketing teams earlier in product development.

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    of 21

    Managing Internal Growth and Nestle:

    The Story of LC1

    Presented by:
    Diana Lim
    The Company

     Founded 1866 in
    Switzerland as an infant
    nutrition company
     480 factories
     276,050 employees
    worldwide
     business volume in 2006
    over $ 100 billion
    Business Strategy

     Encourage product growth through


    innovation and renovation

     Internal growth strategy


    • Develop new products
    • Renovate existing ones

     Develop innovative ideas  transform ideas


    into successful products
    Internal Growth Drivers

    4 pillars for would drive Nestle’s internal


    growth worldwide as identified by Peter
    Brabeck (CEO)
     Operating Excellence
     Innovation and Renovation
     Product Availability
     Communication
    The Story of LC1

     research team in Switzerland discovered a


    culture called Lactobacillus acidophilus, or La-1

     contains a probiotic agent, which is living


    microbial feeding supplements that allow the
    lower intestine to function better

     No immediate plan to introduce in into yogurt


    The Story of LC1

     James Gallagher – European coordinator for


    chilled products
     Andrea Pfeifer – leading scientist at the
    Research Centre

     Create a new segment on the yogurt market

     Position itself as a functional food


    Launch of LC1 in France

     Launched 1994
     Not the success that Nestle had hoped
     Reasons:
    • LC1 arrived late; Danone already in the market
    • Consumers didn’t believe it tasted better than
    other yogurts
    • Purchased based on claims; decision not to
    repurchase was based on taste
    • Too scientific to understand benefits
    Failure

     Danone’s Actimel
     Japan’s Yakult
     Both have outsold LC1
     LC1 failed in France and UK – delisted
     LC1 Go!: introduced 1998 pulled out 2000
     Nestle Brand – associated with Ice cream
    and indulgent desserts
     Marketing Strategy
    Launch of LC1 in Germany

     Launched in 1995
     Highly successful in Germany
    • No clear market leader in Germany
    • Yogurts that made health-based claims were
    new to the market (differentiation)
    • German consumers preferred the taste of LC1
    SWOT Analysis

    Strengths Weakness
    Strong R&D Team/ food
    Late entry into market
    science
    Low cost operator Positioned as too scientific
    Opportunities Threats
    Health consciousness Mature markets
    Introduce more health-based
    Intense competition
    products in Germany
    Reflecting on the Success of LC1

     Understand technical ideas  transform into


    marketing ideas
     R&D process people must talk to business
    people early on in the process
     Think of product concepts: “where could this
    scientific finding be possibly used?”
     Led to the creation of Nutrition division in
    1997
     Restructured compensation package
    Nestle’s campaign for LC1

     First probiotic yogurt

     Supports the body’s defenses

     Special name

     Special design
    TV Spot

     A hedgehog was introduced as a key visual

    He has his
    spikes
    TV Spot

    We haven’t
    TV Spot

    That’s the
    reason why I
    help my body
    with health
    food
    TV Spot

    Everyday
    TV Spot

    With this
    special milk
    ferment
    TV Spot

    It’s good
    for my
    body’s
    defenses
    TV Spot

    This is
    quite to my
    taste
    TV Spot

    Nestle LC1 for


    daily
    consumption
    with health
    plus
    Print Media

     Give a scientific appearance


     Explain the concept of probiotic
     Hedgehog was part of the ad

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