How Nestlé Launched Products Twice as Fast with Customer Discovery, Marketing-Mix Optimization, and Conjoint Analysis

Introduction

In the competitive food and beverage industry, launching new products successfully in China requires both innovation and a deep understanding of consumer needs. Nestlé, a global FMCG leader, partnered with Chaoly and innovation partner Innoleaps to leverage customer discovery, marketing-mix optimization, and conjoint analysis to accelerate their product launch and achieve significant success in the Chinesxe market. By applying a data-driven approach, Nestlé was able to bring their product to market twice as fast as their competitors.

The Challenge

Nestlé’s challenge was to innovate beyond its traditional product lines and identify new growth opportunities tailored to the specific needs of Chinese consumers. They initially assumed that the target audience for a healthy snack would be millennial women in tier 1 cities with higher disposable incomes. However, Chaoly’s data-driven approach revealed a completely different demographic, which fundamentally shifted Nestlé’s product development strategy.

The Objective

The main objective was to unlock new product opportunities by understanding the right target audience, determining the most desirable product features, and creating an innovative value proposition. Nestlé needed to answer key questions such as:

• Who is the target consumer?
• What problem are we solving, and what benefits are most important?
• What product format is most credible?
• How should we communicate the product’s benefits to the target group?
• What channels should we use?
• What is the business opportunity size?

Key stakeholders included Nestlé’s R&D, innovation, and marketing teams supporting product development, all working together to define the product features and refine the market strategy.

The Solution – Customer Discovery, Marketing-Mix Optimization, and Conjoint Analysis

Chaoly and Innoleaps provided a comprehensive strategy combining customer discovery, marketing-mix optimization, and conjoint analysis to ensure that Nestlé’s product resonated with Chinese consumers.

Customer Discovery Phase

1. Fieldwork and Interviews: In collaboration with Innoleaps and Chaoly, Nestlé’s team conducted extensive fieldwork, including interviews with potential consumers. These sessions were focused on understanding customer pain points, needs, and potential gains.
2. Qualitative Data Analysis: The insights from interviews and online surveys allowed Nestlé to uncover the real needs and preferences of their target market. Contrary to their original assumptions, the data revealed that urban professionals neglecting their health, rather than millennial women, were a more promising target.
3. Product Concept Design: Using the insights gathered, multiple product concepts were developed, tailored specifically to address the needs of this new target audience.

Marketing-Mix Optimization

Nestlé adopted a lean approach to optimize the marketing mix, minimizing upfront investment while validating product concepts quickly.

1. Value Proposition Testing: Various value propositions were tested to understand how the market reacted to different messaging and product benefits.
2. Digital Experiments: Chaoly leveraged its own online store on Alibaba to conduct digital A/B tests, validating product features, pricing, and messaging. This provided Nestlé with real-time, authentic feedback from Chinese consumers.
3. Iterative Refinement: Based on the feedback from digital experiments, Nestlé continuously refined the product and its marketing mix to ensure the final product aligned with consumer expectations.
4. Conjoint Analysis: To further refine the product offering, we employed conjoint analysis to understand which product features and pricing combinations resonated most with Chinese consumers. This allowed Nestlé to make informed decisions about product positioning.

Implementation and Results

Over a 12-week period, Nestlé, Innoleaps, and Chaoly collaborated to implement customer discovery, marketing-mix optimization, and conjoint analysis:

1. Data-Driven Product Development: Insights from fieldwork and digital experiments enabled the development of multiple innovative product concepts, refining pricing, packaging, and messaging to meet customer expectations.
2. Effective Market Positioning: The feedback gathered during testing allowed Nestlé to position the product effectively in the Chinese market with an optimized value proposition and pricing strategy.
3. Real-Life Feedback: By using Chaoly’s store on Alibaba, Nestlé gathered real-life feedback from consumers without using their branding. This method provided more authentic insights than traditional market testing.
4. Faster Time-to-Market: The combined customer discovery and growth-hacking methodology allowed Nestlé to bring its product to market twice as fast as its main competitors.

Quantifiable Success

• New Target Audience Identification: The discovery of a previously unrecognized target audience—urban professionals neglecting their health—allowed for more precise marketing and product development.
• Innovative Value Proposition: A compelling value proposition was developed, resonating deeply with the identified audience.
• Effective Market Positioning: The product was effectively positioned with the optimal price and packaging for the Chinese market.
• Faster Time-to-Market: Nestlé was able to launch its new product twice as fast as competitors, gaining a significant advantage in the market.

Conclusion

This case study illustrates how Chaoly’s data-driven customer discovery, marketing-mix optimization, and conjoint analysis helped Nestlé accelerate product launch success in China. With the collaborative support of Innoleaps, Nestlé was able to leverage consumer insights and validate product features in real time, tailoring their product to the needs of the Chinese market. Their success highlights the value of innovation and customer-centric strategies for sustainable growth in the highly competitive FMCG sector.

Disclaimer:
This case study is for illustrative purposes only. To protect confidentiality under the Non-Disclosure Agreement (NDA) between Nestlé, Innoleaps, and Chaoly, specific product details, target audiences, and methodologies have been fictionalized. The product category and demographic described are examples, and any resemblance to actual products, demographics, or strategies is purely coincidental.