Answer

TO: The CEO, Ulf Mark Schneider

FROM:

DATE: Wednesday, May 8, 2019

SUBJECT: The Use of Innovation to Tap Consumers in Emerging Markets

As you look forward to the strategic planning process to promote the Nestle brand, I want to share some of my views with you.

Over the past few decades, we have focused on expanding to international markets to achieve growth. Currently, we operate in 189 countries globally, and with such a broad reach there are market opportunities that we can exploit to gain further growth at lower operation costs. Even though our operations cover some emerging markets, we have overlooked the rural consumers in these regions. Based on a Unilever case, we can use innovations to reach rural consumers in these emerging markets. There are over 3.4 billion rural consumers, and over 3 billion of them live regions where we operate currently. The middle class in this population is expanding making it a potential market for our products.

I recommend that we should address the challenges that have previously prevented us from pursuing this strategy. For the plan to work, we must address product design, communication and logistics issues necessary for tapping the rural customers. Borrowing from the Unilever case, advertising to consumers in rural areas with inadequate electricity, product distribution and offering services and goods that the rural consumers need at the right prices are some of the challenges that must be addressed. For example, using the local distribution strategy is one of the applicable innovations. Majority of local retails in rural areas are small retailers thus distributing products to each one may be costly. Therefore, we can partner with some of these retailers to act as sub-distributors to enable our products to reach the people. I believe this strategy can guarantee our brand expansion especially if all managers are encouraged to develop the rural mindset. 

Lastly, I would like to recognize all you do for Nestle. We would not be where we are without your relentless commitment and passion.