3rd Quarter: September 2010 - Nestlé Professional

Nestlé Professional IndoChina: Passion to win back our
loyal customer by leveraging on our strong brand and
quality
by Puthpong Maneesri
Being the top supplier is not good
enough to ensure the customer will
always be with us. Our experience
tells us that we need to work with our
customer closely as a true partner to
inspire them. The ability to respond
to their business needs and offer the
right solution is the way to work. Here
we have one good story to share with
NP AOA. This story reminds us how
important it is to build long-term
partnership with key customers.
Phueng Noi is a well-established café
bakery business in Chieng Mai,
northern part of Thailand. They are
the largest customer in the North with
business worth 24 million THB per
annum (CHF0.8 million). Phueng Noi
produces all kinds of bakery goods as
well as Thai desserts. Their chain of
bakeries covers many provinces in
the North and has started to encroach
into the Bangkok region lately. They
own about 80% of the outlets and the
remainder 20% are under franchisees.
To keep themselves up-to-date,
Phueng Noi always attends relevant
trade fairs all over the world and looks
for new ideas and solutions to
differentiate themselves. One of the
ideas is to provide a solution to the
Meeting/Catering group which offers
beverages during their coffee breaks
from an outside source. Instead of
only providing coffee or tea, Phueng Noi came up
with the idea to develop a cold beverage in a bottle.
This initiative led them to create a coffee break set
composed of 2 bakery items and one bottle of
beverage.
Phueng Noi has started to produce ice coffee, milo,
milk tea and sala milk. Their policy is to sell at a
reasonable price to customer at 10 THB per bottle,
allowing a 20% margin each for the bakery and
themselves. However, this model meant it was difficult
for them to meet their business target.
Our main competitor approached them with the offer
of a cheaper solution that would allow them to make
a better profit. Attracted by the incremental profit,
our customer decided to go ahead with the competitor.
Once this came to our attention, we took several
key steps.
Internal Nestlé tasting to double check
our product's superior taste and added
value prior to presenting to customer.
• Conducted discussions with
Phueng Noi with the aim of
finding a better solution
together. With our good and
strong relationship with
them, Phueng Noi put their
trust in us to resolve the
issues.
• Took competitor's sample
and conducted tasting
session at our head office
in Bangkok.
• Developed a new formula
with a superior taste profile
whereby the cost must be
the same or lower than
competitor's. Key criteria is
that the main ingredient of
a NP product (e.g. Ice
Nescafé Mix, Nestea
Teatime, Milo etc.) must be
met.
• Conducted consumer taste
tests at a Phueng Noi
bakery shop as well as to
all store managers who
were there attending the
monthly meeting on the
same day. We then took
the findings and reported
them to the owner.
We took this challenge very seriously and aimed to
win the customer back soonest. We also took this
opportunity to present our case to the store managers
and let them try the new formula as compared to
the competitor's in blind tastes. The result? Nestlé
won 67/33. The consumers and store managers
confirmed the quality of our new product.
12 AOA Quarterly September 2010