Nestlé is in the process of trying to win back consumer trust and market share after a somewhat tough period, characterized by price rises and falling sales. According to Swiss broadcaster TeleZueri, chairman Paul Bulcke underscored the need to put Nestlé products within easier reach for shoppers by revisiting its pricing strategy.
Under former CEO Mark Schneider, it increased prices during the pandemic to counter rising costs. However, these price increases, along with a cut in spending on marketing and innovation, made the company an easy target for price-sensitive and innovative consumers. Schneider’s strategy has failed to sustain sales growth, and the company has seen him replaced earlier this year.
Then, in September, Laurent Freixe became the new CEO with the task of rebuilding the market position of it. “Perhaps we drove prices too high,” Bulcke said, pointing out a need for a balance that should encourage customers to choose again products of Nestlé.
The strategy would undo the damage caused by past choices, and the firm would recover market share. Cutting prices might also make competition review their pricing and marketing approaches, thus reconfiguring the consumer goods industry as well.
Nestlé’s move reflects a larger economic phenomenon as companies deal with inflation and changes in consumer preferences. Balancing affordability with quality is critical in a market where cost-consciousness prevails. Freixe’s focus on innovation and competitive pricing signals a shift for Nestlé, one that could set the tone for future industry adjustments.
As Nestlé rebuilds its reputation and financial performance, the global consumer goods sector is sure to see a changed market dynamic in its pricing strategy.
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