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-aprice” 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