Blog Post #3
Economic side of Distribution- Powerbars
Nestle’s Marketing Strategies
Recently, Nestle has broadened its marketing strategy by working as a franchise machine across the world. It is a global multinational corporation that exists within local communities. Nestle brands everything locally and works regionally. Most of its plantations are abroad while corporations are in the US and Europe. They have a global approach in technology and are very advanced in the way it enters new markets. Rapoport’s article, Nestle’s Brand Building Machine, calls Nestle the modern day “Roman Empire School of Marketing” for its tactic in settling in, colonizing as much territory as possible, adapting to the new land, and keeping away competition that trying to intervene for resources.
Nestlé’s business approach consists of traveling across open markets to discover new markets. Its persistence in entering markets in China has led it to reach a leading role as a food company in China and Vietnam. Nestle has already branded many products and resources in Mexico, Brazil, Chile, and Thailand. Nestlé is considered one of the most powerful food companies in the global economy. There is a give and take with the companies it makes business with. For example, Rumble the Jungle explains the extraction of palm oil in Indonesia is hurting the local communities. Yet, the Indonesian government benefits from the income gained from the extraction of palm oil; it goes towards the corrupt elite. Why?
Well, when every metric ton in Indonesia forests are priced at $900 and there is an annual 24 billion dollars made from exporting palm oil from Indonesia…it is tempting for those who want more money and power.
Nestle does not always buy directly from “damaging” markets. It is careful about its reputation. It has been humiliated and media-bombed for its engagement in labor exploitation and destruction of natural environment resources in the past. For example, farmer’s beans are bought by other middlemen which later exports goods to Nestle. The supply chain goes through a series of distributors and as the cocoa or coffee beans gain market value, it is too late for the primary farmers to receive their proper share. They are forgotten and left at the bottom of the value chain. Farmers are left with little to nothing.
Rapoport, C. (1994). Nestlé’s brand building machine. Fortune,130147.
Gilbert, D. (2013). Rumble in the jungle. Earth Island Journal, 27(4), 40-45.