Bauer MBA’s Nestle Study Wins Michigan Case Competition

Published on June 26, 2010

Focusing on Nestle South America Condensed Milk Business,
Mendez Takes First Place in International Case Competition

MBA student Deborah Mendez examined what was driving Nestle’s customer business among poor women in Venezuela.

Deborah Mendez is an MBA student at the Bauer College of Business at the University of Houston with an uncommon career goal – she wants to be an authority on marketing products to those at the bottom of the economic pyramid.

Recently Mendez took a large step down that path with the top paper in the NextBillion Case Writing Competition, which honors work that studies connections between economic development and enterprise. The international competition run by the University of Michigan William Davidson Institute also honored work from students at Tufts University, the Stern School of Business at New York University and York University in Ontario.

The case study, “The Sweetest Business of Nestle Venezuela: El Dulce Negocio,” explained how the multi-national food company expanded the market for its sweetened condensed milk in Venezuela by teaching low-income women how to start a business selling baked goods.

Business driven campaigns created to reach out to the poorest members of society are part of a growing movement, which gained its name from the book The Fortune at the Bottom on the Pyramid:  Eradicating Poverty Through Profits, by C. K. Prahalad.

In Venezuela those at the bottom, earning about $2.50 per-person a day, represent a vast potential market covering about 80 percent of the population.

“The goal is to treat them not as victims or a source of problems, but as people capable of innovation and creativity that can be participants in the market,” Mendez said.

For her, it was a personal story as well. The Venezuelan-native worked in marketing for two international food companies in the country after graduating with a bachelor’s degree in business administration there. The idea for the paper came from a college classmate who worked at Nestle on the project.

Mendez, who enrolled as a full-time MBA candidate at the University of Houston after immigrating here, traveled back twice during the semester while working on the paper to meet Nestle executives and to see how, and why the company created the program.

In creating this business model Nestle went to great lengths to get to understand the lives of its customers.

“Nestle goes to low income neighborhoods and teaches them how to make cakes and pastries, how to track their costs and set prices so they can sell to their neighbors and families,” Mendez said. By teaching them how to start their own business they are helping the housewives increase their household income without sacrificing family duties by going to work outside the home.”

Mendez attended the classes to see how it worked. She was impressed that the brand manager for Nestle spoke to the students about how they could take what they’d learned in the class and start a business of their own.

Ted London, a contest judge and Senior Research Fellow at the Williams Davidson Institute, said the paper was honored because it was a well-written case that showcased several important challenges that managers can face in the developing ventures to serve the base of the pyramid.

Mendez’s advisor on the project, Steven Koch, an executive professor who is director of the Business Consulting Lab, praised her marketing savvy, organizational skills and the drive that allowed her to do top-quality research while taking a full load of classes.

Koch said the visibility gain by getting her paper published by the Davidson Institute is a plus for Mendez who has shown she passionately wants to have a career in marketing to those in lower socioeconomic groups.”

The cases will be formally published through the William Davidson Institute at the University of Michigan and will be available for sale online (http://www.globalens.com) and in booklet form. This site requires registration and says it is open to educators.

By Stephen Rassenfoss

Posted Under: Graduate

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