Nestle hits mainland with cheap ice cream

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[Beijing] Nestle is targeting China with a blitz of low-price ice cream products selling for as little as 12¢, a strategy that follows in the footsteps of Unilever and Procter & Gamble Co. in emerging markets. Those two powerful marketers have learned to develop products with local appeal from tea to Tide in smaller sizes, more economical packaging and cheaper formulations to wring sales out of low-income consumers in Asia and Latin America.

In mainland China, Nestle is taking on strong local rivals such as Yili, a Chinese dairy giant, plus international competitors like Unilever's Walls ice cream line, with an aggressive campaign to expand its consumer base. Nestle started a national marketing push early this month to push 29 new ice cream brands, many of them low- and mid-range priced value-for-money products. Prices for single-serve impulse items are as low as 12¢, while take-home and multipack products range from 72¢ to $2.30.


"Our strategy is to continuously improve our quality products and offer value for money to consumers, and expand availability on every front," said Hong Kong-based Ken Donaldson, director of Nestle's ice cream business unit in Greater China. The company's total sales in Greater China grew 11.5% in 2004, although Nestle did not break out total sales for the region.

Nestle's line-up includes new flavors and sizes for international brands such as Drumstick. It also features products specially designed for the local tastes and preferences of Chinese consumers, such as Nestle Snow Moji, a rice pastry filled with vanilla ice cream that resembles dim sum, and Nestle Frosti, an ice milk product sold in local flavors like red bean and green tea.

The products will be marketed with a national TV campaign starting March 21, backed by print, outdoor and online media. WPP Group's MindShare handles media planning and buying.

Ads developed by WPP's JWT office in Beijing feature a Blue Ice Genie, a brand icon launched in China two years ago to position Nestle's ice cream products as enticing, irresistible and imaginative. The Blue Ice Genie appears in advertising as well as on branded ice cream freezers. Nestle also started a two-month SMS promotion in early March that gives consumers daily chances to win Apple iPod Mini music players.

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