NEW DELHI: Nestlé India is building a regional approach that will embrace all aspects of the business, its chairman has said, while it also intends to introduce more products from its global range.

“We are evolving a structure to divide markets into 10-15 clusters, and are segmenting product variants, distribution, sales, marketing and communication in relevant geographies,” said chairman Suresh Narayanan, in remarks reported by the Economic Times.

The food and beverage company, which two weeks ago reported 2017 sales up 7.7% to cross the Rs 10,000 crore barrier, has reportedly set a target of at least 3% incremental sales each from the regional variants.

In a huge and diverse country, the production of regional variants would seem to make sense but businesses also need to consider the possibility that their brand marketing simply needs a makeover before they commit to potentially costly production investment.

In a 2017 ESOMAR paper, Ritanbara Mundrey of Nestlé India, outlined how prevailing opinion within the business had been that a key food brand performing well in the North of India but losing share in the South required a product variant for the latter region.

But on closer examination it became apparent that there were no great taste differences between the two but rather that Nestlé hadn’t paid enough attention to the South, unlike its rivals.

“The brand had quite simply some internal corrections to make on many aspects of the marketing mix before venturing into new product development,” Mundrey said.

Nestlé India claims a good strike rate when it comes to NPD, however: according to Narayanan, most of the 40-plus new products that the company launched last year were successful. Between 10% and 15%, he said, would need to be either tweaked or discontinued.

In the year ahead, Nestlé India plans on adding more products, such as protein supplements, from its extensive global portfolio, and on exploring new categories, such as premium coffee and snacks.

Sourced from Economic Times; additional content by WARC staff