Nestle When Consumers Think of Nestle, They Probably Think of Chocolate

question 54

Multiple Choice

Nestle
When consumers think of Nestle, they probably think of chocolate. Historically, though, Nestle's confectionary business is its weakest area. Based in Switzerland, it is the world's largest food company, with a brand arsenal of Nescafe, Jenny Craig, Perrier, Purina, and PowerBar, just to name a few of its 30 product lines. Nestle is hoping to become the "world's leading health, nutrition, and wellness firm" by spending billions of dollars on research and development of functional foods--foods that have pharmaceutical-like capabilities to enhance energy and heart, bone, gut, and other health. Nestle wants consumers to see chocolate as a pharmaceutical product rather than just a treat. Part of this new focus includes streamlining their product mix by selling underperforming items or lines that do not fit its new direction. Critics claim this new focus could hurt the company's existing brands if the new products fail. Additionally, it may be an uphill battle convincing consumers that a company known for indulgence is now a wellness company.
-Refer to Nestle. What adjustment to its product mix is Nestle doing when it sells underperforming items?

• A) product line extension
• B) product line contraction
• C) product pruning
• D) product line retraction
• E) functional modification

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