Journal of Macromarketing

http://jmk.sagepub.com/ Nestl: A Brief History of the Marketing Strategies of the First Multinational Company in the Ottoman Empire
Yavuz Kse Journal of Macromarketing 2007 27: 74 DOI: 10.1177/0276146706296713 The online version of this article can be found at: http://jmk.sagepub.com/content/27/1/74

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Nestl: A Brief History of the Marketing Strategies of the First Multinational Company in the Ottoman Empire
Yavuz Kse

It can be argued that private companies accelerated the integration of the late Ottoman Empire with the capitalist world economy. Western companies shaped not only the Ottoman economy but also its social and cultural environments. Modern marketing was one of the most important instruments in this process. This article investigatesvia a brief historical survey of the marketing activities of Nestl in the Ottoman Empire between the years 1870 and 1921the interaction between Western firms and consumers. The article explores how Nestl gained access to the urban Ottoman market and the methods it used for attracting the Ottoman consumer. Nestls sales efforts show that it had to adjust its strategies to local realities through a process of learning, adapting, and using the specific characteristics of its host society to be successful. Keywords: Nestl; Ottoman Empire; Turkey; Middle East; Istanbul; marketing history; advertising; consumption

uring the past twenty-five years, a number of scholars (Eldem 1994; Issawi 1980; Kasaba 1988; Owen 1981; Pamuk 1987; Quataert 1994) have made important contributions to the economic history of the Ottoman Empire in the nineteenth century. The general consensus has been to assume that the Ottoman economy was moving toward full integration with the capitalist world economy, a process leading to commercialization, urbanization, infrastructural innovation and the consolidation of European financial control over the economic sources of the Empire (Akarl 2000, 109). Researchers have assumed that inexpensive imported Western goods had a great impact on Ottoman economy and society, but the exact nature of this impact remains unclear. The main reason is that issues of marketing, advertising, and the relations between companies and their host societies were not given sufficient attention and have therefore remained an obscure and neglected field in Middle Eastern history. Thus, a whole array of questions concerning foreign companies, their goods, and the Ottoman consumer market were not considered until recently.
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Among the few authors who have addressed these issues is Rudolf Agstner (1999, 2004), who was probably the first to pay attention to the activities of Western department stores in the Middle East, especially in Egypt. In her extensive study, Nancy Reynolds (2003) unfolds in detail the relation between department stores and communities of urban commerce in Cairo from the 1890s to the 1950s. Although Uri Kupferschmidt (2004) is concerned more with the social history of the Singer sewing machine in the Middle East, he also provides us with preliminary information about the marketing of this consumer durable, perhaps the first massproduced consumer good sold world wide (Davies 1976; Godley 2001). Relli Shechter, in his book Smoking, Culture and Economy in the Middle East (2006), examines the emergence of modern markets in the Middle East, focusing on the Egyptian tobacco market and tobacco consumption. Finallyand probably the closest to the topic raised here Michaela Kehrer (2005) is concerned with the marketing activities of multinational companies distributing consumer goods in contemporary Egypt and the role local culture plays in their marketing strategies. This study adds to the literature in two ways: first, it aims to give a historical survey of the activities of one specific multinational company, and second, its geographical scope is centered not on urban Egypt but on the capital of the Ottoman EmpireConstantinople, or Istanbul. Once inexpensive, mass-produced consumer goods started flooding the Ottoman market, the consequences of this change require some elaboration. What happened to these goods? How did products shape and change local economic practices and local value systems? Or, to put it another way, how did foreign companies act in a country with different cultural traditions, languages, and consumption behaviors?
The author expresses deep gratitude to Ibrahim Muhawi, whose patience, suggestions, and professional support helped shape this article. Furthermore, the author would like to thank Albert Pfiffner, Gisela Prochzka-Eisl, Deniz Van Basselaere, and Aylin Besiryan for their invaluable information as well as the editor and the anonymous reviewers for their helpful suggestions. Journal of Macromarketing, Vol. 27 No. 1, March 2007 74-85 DOI: 10.1177/0276146706296713 2007 Sage Publications

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The very existence and availability of a Western good in the Ottoman market did not necessarily mean it had to be bought. Other foreign items could be purchased, and local choices also existed (Quataert 2000). Generally, the consumer had to be convinced to buy, say, Nestls breast-milk substitute Farine Lacte instead of that of its competitor, Thistle, or a local alternative infant formula called Memedeki ocuklara gida-i dakik (instant food for infants) offered by Doctor Ziya. Similarly, many shops and department stores, either local or of foreign origin, courted the consumer. And a quick look at the advertising pages of the Ottoman press gives us the sense that selling products was hard work. This situation prevailed for many consumer-goods companies active in the Ottoman realm. Knowledge of the market realities of the host society as well as the cultural dispositions of the target consumer were essential for companies to bridge the gap between the newness and foreignness of themselves and the particular needs of the target consumer. On the other hand, the target consumer was also faced with a need to engage in a process of searching, learning and adapting to the products and services offered by firms (Lipartito 1995, 2). This process of reciprocal adaptation will be examined herein via a case study of the Swiss company Nestl, which started operating in the Ottoman Empire in the early 1870s. Nestl was the first multinational company active there and still does business in Turkey today. This article presents a brief historical survey of the marketing activities of Nestl in the Ottoman Empire between the years 1870 and 1921. It will explore the means used by Nestl to gain access to the Ottoman urban market and the methods used to attract the Ottoman consumer. The purpose of the study is to reveal how modern marketing was put to use in the Ottoman market by Nestl and how the urban Ottoman society perceived the company, its products, and its marketing activities. In examining the relation among modern marketing and the Ottoman society, the aim is to give some preliminary answers to some of the questions asked earlier. In line with the current literature (Aktar 1998; Chalcraft 2004; Palairet 1997; Quataert 1993; Shechter 2006), it is suggested that the oftencited flooding of the Ottoman market with Western goods did not lead to the total disappearance of local production. The relationship between Western companies and local consumers was more complex and more mutually negotiated. The example of Nestls marketing activities from 1870 to the 1920s indicates that local consumers influenced foreign consumergoods companies as much as the latter did the former, or as Lipartito (1995, 2) puts it, they both engage(d) in a process of searching, learning and adapting to create the marketplace.

Switzerland. The AHN contains primary sources for all companies that, until 1970, came under the direction of Nestl. For the Turkish market, AHN provides material ranging from sales statistics and advertising expenditures to sample advertising ephemera beginning in 1870 to the companys own advertising journal, which was first published in 1920. The latter document highlights Nestls sales effort and the development of its marketing techniques in its different markets. Published here for the very first time, some of this material is a bit sketchy. Thus, Ottoman daily newspapers and journals compose a second set of primary sources. These not only contain examples of Nestls advertising and promotions, but they give further evidence of how the Ottoman public reacted to and commented on foreign companies, their goods, and even their marketing. The study will proceed chronologically, starting with the year 1870 until the year 1921. The various time spans used here18701905, 19051912, 19121916, 19141918, and 19191921reflect different stages of Nestls activities and crucial turning points for the companys marketing (Hollander et al. 2005). These turning points are best described as a set of internal and external causes that motivated changes in Nestls policy toward the Ottoman market. The period between Nestls beginnings and its entering into the Ottoman market was short for two reasons. First, the relatively small Swiss market forced Nestl from the beginning to search for new opportunities (Schrter 1993, 1997). Second, the Ottoman market was seen as potentially lucrative for the Ottoman state; its urban society and its economy were all modernizing and Westernizing in the late nineteenth century. Before examining Nestls activities in detail, the following sections offer a short introduction to the companys history, followed by a description of the general situation of the Ottoman Empire in the late nineteenth century.

NESTLS FIRST YEARS Nestls marketing strategies were first developed to sell a new product: infant formula. These strategies proved very successful from the beginning and contributed to the companys early market leadership and global expansion. When Nestl was founded 1867, it was one among many producers of infant formula, but within a few years, it became the market leader (Orland 2004; Pfiffner 1993; Teuteberg and Bernhard 1986). By 1875, the company was exporting to more than twenty countries, including less advanced regions such as Egypt, Russia, the Ottoman Empire, and Indonesia/Malaya (Manderson 1982; Orland 2004; Pfiffner 1993). However, controversy surrounded this product category. In the 1860s, a huge number of publications extolling the merits of breast-feeding became available in Europe, but at the same time, critics associated infant mortality with the omission of breast-feeding (Orland 2004). While other factors could be correlated with infant mortality, and breast-feeding

DATA SOURCES AND PERIODIZATION Primary source materials for this study were obtained from the Historical Archives Nestl (hereafter AHN) in Vevey,

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was not the only possibleand availableway to feed babies, the must-breast-feed discourse became very strong among health professionals, public-health authorities, and womens organizations (Beamer 1973; Orland 2004; Pfiffner 1993; Teuteberg and Bernhard 1986). Health professionals, in particular, complained that the increasing amount of advertising for breast-milk substitutes hindered their efforts to promote natural feeding. Therefore, companies found themselves in the paradoxical situation of selling infant formula, which they tried to promote as a scientifically proven substitute for breast milk, but without giving the impression that they were keeping mothers from breast-feeding. Nestl and other producers were thus forced to develop elaborate marketing tools to deal with this contradictory situation.

THE OTTOMAN EMPIRE AND NESTL In contrast to the mostly Western market areas in which Nestl invested in local production, the company saw the Ottoman Empire in the beginning only as an export market. The goal of founder Henri Nestl was to aim for great capitals in all of Nestls market areas, whether in Europe or in other parts of the world (Pfiffner 1993). The greater urban centers were ideal markets for Nestls milk-based product, Farine Lacte. Fresh milk was in short supply, wet nurses were problematic, and breast-feeding was going more and more out of fashion among the urban well-to-do. In the cities, workingclass people increasingly suffered from a shortage of time and often lived and worked in unhygienic conditions. Compared to Europe, the Ottoman Empire in the nineteenth century was relatively less developed, but the Ottoman consumer first targeted by Nestl could hardly be regarded as poor, and the Ottoman capital Constantinople, todays Istanbul, was an ideal place to promote Farine Lacte. Beginning in the 1830s, the Ottoman regime increasingly faced political, social, and financial challenges associated with encroaching modernization. Pressures on the Sultan from the European powers affected the military first, then the bureaucratic apparatus, and finally, the whole society. While the Ottoman state coped with new ideas, a flood of massproduced goods (favored by the trade agreements signed with European states starting in 1838) transformed traditional production via guilds as well as consumption patterns in the larger cities of the Empire. The urban population was growing. The population of Constantinople, estimated at 870,000 in 1885, reached one million in the 1900s (Duben and Behar 1991; Karpat 1985). The capital had a cosmopolitan mix of European and Levantine residents and an ever-growing Ottoman bureaucratic class with a relatively high level of income and an inclination toward European ways of living. These groups guaranteed a steadily increasing customer pool for foreign products, and beginning in the 1870s, became the target market for Nestl in the Ottoman realm. Therefore, the rapid social and cultural changes that accompanied

the Westernization of urban societyone of the major forces of change at the time (Duben and Behar 1991, 3; Esenbel 1994)paved the way for Nestls marketing efforts. As in Europe, the Ottomans produced an abundant literature on public-health conditions, personal hygiene, infant mortality, and the proper ways of feeding and rearing children (Anastassiadou-Dumont 2003; Duben and Behar 1991). Ottoman pediatricians shared the views of their European counterparts, which is not surprising, for many of them were trained in major European capitals such as Paris. For example, Besim mer [Akalin] ranked among the most influential health professionals. He actively promoted health care for children and their mothers (Isl lman 2003). In his writings, mer emphasized the importance of mothers milk for infants up to six months and the need for supplementary nutrition after that period, which, in Ottoman times, consisted of mixtures of water or milk with rice, wheat, oats, or corn flour (Besim mer 1896; Isl lman 2003). Besides health publications, one also finds a large number of references to breast-feeding in the Ottoman press, mostly as letters to the editor. It became evident that breast-feeding children for an extensive period of time (up to one year and more) was a quite common practice, even among the well-todo (Duben and Behar 1991). Thus, the conditions that prevailed when Nestl entered the Ottoman market posed a challenge for the company. True, the state apparatus and urban Ottomans were in a modernizing mode, but cultural practices and attitudes about breast-feeding remained more traditional. On the other hand, the attitudes of health professionals toward breast-feeding substitutes was not entirely negative. The issues and problems surrounding breast-feeding were, in some respects, similar to those in Europe at the time. However, as we shall see, other influences on the family and the Ottoman consumer also entered the picture. Nestls marketing had to reconcile all of these factors.

NESTL IN CONSTANTINOPLE: THE FIRST THIRTY-FIVE YEARS (18701905) In 1874, Nestl was acquired by Jules Monnerat, who renamed the now limited-liability corporation Farine Lacte Henry Nestl. The companys approach to national and international markets was maintained by the new management (Heer 1991; Pfiffner 1993). As was the case in Europe, agents handled distribution in the Ottoman market. Pharmacies were crucial for distribution everywhere because infant food was seen not just as a substitute for mothers milk or a supplement to breast-feeding but also as medicine for sick children, and somewhat later, for the elderly, too (Pfiffner 1993). Sales data for Farine Lacte from the years 1870 to 1904 show clearly that E. Haenni (of Staeger & Haenni) was the sole agent in Constantinople (Sigerist 2004). Others, who were distributors rather than agents, were also listed for the greater cities

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of the Ottoman Empiresuch as Smyrna, Salonika, Cairo, and Alexandriaand are identified mostly as pharmacists (Tableaux des Ventes Farine Lacte: 18681875, 18751879). The Constantinople agent was not only responsible for selling and distributing the product, mostly to local pharmacies, but also for advertising it in diverse Ottoman daily newspapers and periodicals. The initial advertising expenses for Ottoman cities are listed in the account book for the year 1880. Nestl advertised in Ottoman/Turkish publications such as Vakit, Terdjuman-i Efkiar, in local European newspapers such as Levant Herald and Alexandrie Bulletin Financier, and in the local minority press, such as the Greek Neologos (Publicit 1880). Thus, potential consumers were not only well-off Turkish Ottomans but also Arabs, Armenians, Greeks, Jews, and Levantines. Advertising in different dailies and journals was by no means the only activity in those years. As was the practice in Europe at the end of the nineteenth century, recommendations written by persons in the medical profession, especially pediatricians who tested the product, were also given press coverage (Pfiffner 1993; Nestl Certificats XVII 18981902). Although press advertising remained the most important way to reach the Ottoman consumer, the 1890s saw an increase in expenditures on samples, brochures, prospectuses, pictures, and enamel plates. By the early twentieth century, expenses for these were exceeding those of press advertising (Tableaux Comparatifs des Ventes 1897, 18991905 [hereafter TCV]). This promotion mix was similar to that in countries such as France, Germany, or Great Britain, but the amount spent (and sales volumes) were not nearly as high. Nevertheless, the Ottoman market was growing (TCV 1897, 18991905). The above data indicate that some promotionsfor example, advertising on buses and tramswere still not used in Turkey at the end of the nineteenth century. On the other hand, Nestl used the traditional method of Ottoman guild artisans, who often presented their goods to the public by marching through the streets on camels while playing music. A photograph dated 1900 depicts such an event to promote a second Nestl product, the condensed-milk brand Le Nid, which was launched to compete with the rival Anglo-Swiss Condensed Milk Company, an enterprise founded in 1866 (Heer 1991; van Orsouw, Stadlin, and Imboden 2005). The picture shows an assemblage marching through the streets of the capitol: two camels, each carrying two oversized milk cans, people holding panels that announce the advantages of the product in Ottoman-Turkish and in French, and a group of musicians (see Figure 1). Attracting attention this way reached additional Ottoman consumers who may not have been literate. Interestingly, some years later, the Nestl head office was built in the district where the picture was taken, the so called Karakeuy place, which was and still is a strategic location in Istanbul. Later on in the 1920s, Nestl used this camel-promotion in its Latin American market (Sociedad Nestl A.E.P.A. 1992).

FIGURE 1

PROMOTION OF NESTLS CONDENSED MILK LE NID, 1900 SOURCE: Photo courtesy of Nestl Turkey.

NESTLS MERGER WITH ANGLO-SWISS CONDENSED MILK COMPANY (19051912) The year 1905 was crucial for the Nestl Corporation. It merged with its most successful competitor until then, the Anglo-Swiss Condensed Milk Company, and became the Nestl and Anglo-Swiss Condensed Milk Company (hereafter NASCM). Together, the new company was capitalized at more than forty billion Swiss francs and had eighteen factories located in Switzerland, Great Britain, Norway, Germany, Spain, and the United States (Heer 1991). This fusion also had far-reaching consequences for Turkey. The new enterprise had four directorstwo in Vevey, and one each in Cham, Switzerland, and London. The London headquarters became most important for organizing exports to the Middle East market, which included Egypt, Syria, Palestine, and Mesopotamia as well as Turkey, the Balkans, and Greece. As late as 1910, London played a major role in the Ottoman market (see below). The new management of NASCM decided to reorganize sales and distribution by replacing most of its sales agents, including in Constantinople, with local subsidiaries (Heer 1991). The contract with the Swiss E. Haenniwho had been the sole agent in Constantinople between 1878 and 1905was canceled because of decreasing sales levels (Pfiffner 1993). The AHN does not provide specific information as to Haennis replacement, but we learn from contemporary advertisements in Ottoman journals that a certain George Baker & Son became Nestls new warehouse distributor. Besides Farine Lacte and condensed milk, George Baker & Son introduced new and more extended product lines to the market, such as cacao, chocolate, and sweetened and sugarless condensed milk. Under the direction of the London headquarters, with George Baker & Son as the new local distributor, product

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script were deployed to create one of the most interesting examples of what we might call ethnic advertising. This type of advertising used the traditional levha1 practice to promote Nestl products without the brands bird nest, which was the primary advertising symbol in the European market (see Figure 2). In addition, outdoor advertising became more and more important during this period for attracting attention to Nestl products.

CONSTANTINOPLE BECOMES THE HEAD OFFICE FOR THE MIDDLE EAST (19121916) As a consequence of Nestls increasing activities in Turkey, particularly in Constantinople, the company decided in 1912 to move its department for the Middle East market from London to Constantinople (as we shall see a significant move in terms of World War I). Edouard Muller, who since 1910 had been especially concerned with the Middle East market, accompanied the move. This had far-reaching consequences for Nestl as a company. Not only did the new arrangement help to build up Nestls activities in Turkey, but it was also a key factor in its future growth as a company, for Muller was later to become the head of Nestl Paris and would reorganize worldwide distribution (see below) before becoming CEO in 1937a position that he held until 1948. Between 1912 and 1913, Nestl had its own head office and depot erected in Constantinople, near the above-mentioned Karakeuy place (see Figure 3). This building, which still exists today, was most likely a commissioned work designed by the famous Turkish architect M. Vedad Tek (Batur 2003). From this office, Nestl began a marketing offensive starting in 1913. One of the most remarkable actions was publishing a twenty-sixpage advertising supplement in one of the most famous Ottoman journals of that time, Servet-i Fnun (February 1913; see Figure 4). Almost certainly, this is the first example of a corporate advertising supplement in the Ottoman press. This illustrated supplement gave Ottoman readers detailed information about Nestl, including its origins, factories, production processes, new office and staff, and of course, product-preparation directions and recipes. At the same time, Nestl started promotional contests, which were advertised in local newspapers and went on for long periods of time. Although the firm had first used outdoor advertising and billboards in 19051906, it now started illuminated advertising in the European district Beyoglu, also known as Pera. Nestl vaunted this new technology as the greatest illuminated outdoor advertising of the city (see Figure 5). The Ottomans did not appear to have clear regulations concerning outdoor advertising. However, under Sultan Abdlhamid II (18751909), directives stipulated that advertising with posters and placards (affiche) was only allowed with authorization from the municipality. Generally speaking, commercial outdoor advertisements seem to have been allowed as long as they did not offend against religious law

FIGURE 2

NESTL MILK CHOCOLATE IS THE BEST! ADVERTISEMENT IN THE PERIODICAL SHEHBAL, 1909

FIGURE 3

NESTLS ISTANBUL OFFICE, NESTL SUPPLEMENT, SERVET-I FNUN, 1913

lines, marketing, and advertising for the whole Middle East were revitalized. From 1906 onward, advertising activity increased markedly. More and more visuals supplemented advertising copy. The calligraphic elements of the Ottoman

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FIGURE 4

NESTL SUPPLEMENT FRONTPAGE, SERVET-I FNUN, 1913 FIGURE 5 NESTL ILLUMINATED (CHILD IS CRYING, CHILD IS LAUGHING), NESTL SUPPLEMENT, SERVET-I FNUN, 1913

or the person of the Sultan (Young 1905). By the early 1900s, Nestl had already realized that it was important to address oneself to the attention of the masses, to attract and to arrest their attention (La Publicit Humoristique 1921, 21; all translations by author). The company took measures to do so. It placed billboards, distributed outdoor enamel plates for stores (see Figure 6), created window displays in the sales department (La Publicit Humoristique 1921), maintained close contact with Ottoman health professionals, and was present at exhibitions organized by the Red Crescent and the Greek Red Cross (La Publicit Humoristique 1921). The activities of the new head office in Constantinople show evidence of more market-oriented research and use of these insights for new marketing concepts and techniques. In this respect, the use of contests was decisive. For example, the company launched a contest in the Ottoman daily Tanin in early 1914 in which customers had to bring twelve Nestl condensed-milk labels to the head office to take part

in a lottery and have a chance to win one of the prizes (Nestl Sd Etiketlerinin Byk Msabakas 1914). It is not a mere coincidence that the condensed-milk campaigns started about the year 1913, just after the municipality had forbidden for hygienic reasons the selling of milk in copper bowls on the street (Kologlu 1999). The Ottoman govern ment was making an increasing effort to bring hygiene levels to European standards (Moulin 1992; zgr 1999; Isl lman 2003), and Nestl, quite aware of these regulations, used them to gain an advantage over local competitors. In the local German daily Osmanischer Llyod, Nestl advertised the public health authoritys confirmation that its condensed milk was clean while some of its competitors milk was not (Announcement 1914). This advertisement also announced that competitors were trying to copy not only Nestls products but also its name and that a company

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FIGURE 6 NESTL ENAMEL PLATE SOURCE: Courtesy of Nestl Turkey.

named Thistle was only a bad imitation. The year before, Nestl had made it known in the daily Le Moniteur Oriental that it was willing to start proceedings against some merchants who would label their products with brand names that were analogue celle de Nestl (La Cie Nestl Intente un Procs 1913, 3). When the Ottomans finally entered the war in November 1914, Nestl was prepared to reconsider the new situation. In a meeting of the board of directors, it was decided to change the name Nestl & Anglo-Swiss Condensed Milk Co. Agence Gnrale du Levant Constantinople to Compagnie Nestl Constantinople. Although the reasons for this change are not mentioned, it is not hard to imagine why the management dropped the word Anglo from its name (Minutes of the Board 1915).

between 1906 and 1914, we do know that in the 19001905 period, Nestl sold, on average, ten thousand to twenty thousand tins, whereas in 1915, its sales had increased tenfold (TCV 18971906; Nestl Sales Statistics 18991916). The war was the main factor in Nestls growth. Despite milk shortages, disruptions, and the difficulty of acquiring and distributing material, the war created tremendous new demand for dairy products, largely in the form of government contracts. To keep up, Nestl purchased several existing factories in the United States. By wars end, the Company had 40 factories, and its world production had more than doubled since 1914 (History 19051918; Heer 1991). Although the Great War became a major impetus for Nestls increased production and activity, rapid growth trends for the Ottoman market most likely were established earlier. The years between 1908 and 1914 were a troublesome time in the history of the Ottoman Empire. With the revolution of 1908, the Young Turks (Kansu 1996) put into effect the constitution of 1876, in which many Ottomans had put great hopes. But their hopes for freedom, stability, and prosperity after thirty years of the continued despotism (istibdad) of Sultan Abdlhamid II (Georgeon 2003) were not fulfilled, nor could the new government gain substantial advantages in the international arena. One disaster followed another: a war with Italy between 1911 and 1912, the Balkans War between 1912 and 1913, and finally, the entry into World War I. Nestl controlled the Middle East and Balkan areas in situ, and from 19121913 onward, the Constantinople office put the Balkans, Greece, Syria, Palestine, Mesopotamia, and Turkey under its direct control. The Balkan Wars involved heavy losses for the Ottomans (Dumont and Georgeon 1989; Macfie 1998). Though no direct evidence shows that Nestl had a contract with the Ottoman government during these wars, it did supply the Ottoman army with food, and in appreciation, Sultan Mehmed V awarded Nestl a certificate and a silver industry medal in 1913. This award, styled like the classic imperial edict (ferman-i hmayun) with the calligraphic tughra (a seal formed from the name of the sovereign and his father) of the sultan, increased Nestls prestige locally (see Figure 7). Two years later, this very certificate was used by Nestl in the Latin American market as proof of its geographic expansion and success (Almanaque de la Harina Lacteada Nestl 1915). Even today, it is used by Nestl Turkey on its Internet sites.

REORGANIZING NESTL AND ITS INFLUENCE ON MARKETING (19191921) The postwar period confronted Nestl with a severe crisis that became apparent as [G]government contracts dried up following the cessation of hostilities, and civilian consumers who had grown accustomed to condensed and powdered milk during the war switched back to fresh milk when it became available again (History 19181938). To face

NESTL DURING THE WAR (19141918) Why did the activities of Nestl increase so rapidly following the opening of the Constantinople office? Although sales data for Turkey and the Middle East do not exist for the years

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FIGURE 7

NESTL AWARD, NESTL SUPPLEMENT, SERVETI FNUN, 1913

these problems, Nestl, in 1919, reorganized its distribution system under the direction of the newly founded head office in ParisAdministration des Maisons de Vente Continentales. Edouard Muller, formerly responsible for the Middle Eastern market, became the new directeur pour le continent, with the coordination of finance and marketing under his control. Distribution was subdivided into a network of offices, called Maisons de Vente Continentales (hereafter MVC), located in the capitals of Belgium, Denmark, Spain, Netherlands, Scandinavia, Russia, and of course, the Middle East: Turkey, Bulgaria, Greece, Yugoslavia, Syria, Palestine, and Egypt (Nestl & Anglo-Swiss Condensed Milk Company 1919). In the Ottoman market, Nestl expanded its network beyond capital cities, adding local agents in remote areas such as Samsun or Trabzon in the Black Sea region. Marketing, or as described in the administration report for the new management, publicit (this domain which

is so important and so wide) now received greater emphasis (Nestl & Anglo-Swiss Condensed Milk Company 1919, 11). The report states that the sales control unit (contrles des ventes) should gather together in one place all the different advertising practices used by the MVCs, not only for control purposes but to facilitate the classification of the ideas, suggestions, and activities of all the directors of the MVCs. This concentration of marketing efforts in Paris would allow Nestl to profit in one region from the success of marketing techniques used in other, comparable regions: if necessary these methods will be modified or perfected in order to adapt them to the other markets (Nestl & Anglo-Swiss Condensed Milk Company 1919, 11). One way of rationalizing this effort was the companys monthly publication Bulletin Mensuel de Pulicit (BMdP), which would enable the directeurs of the different MVCs to exchange their ideas about advertising, share the results of their experiences, and give practical advice to each other. The first issue was published in April 1920, and later issues were sent out on a regular basis. Articles included in BMdP provide evidence of Nestls awareness of the differences between markets, especially between the Occident and the Orient. Whereas, for example, it was relatively easy to get information about families with newborn children through the Service de Natalit (registry offices) in Europe, these data were much harder to obtain in the Ottoman Empire. In addition to the deficit of information available in the Orient, Nestl had to overcome problems of cooperation from local administrations, which was easier to achieve in the Western countries. Even if the right information could be found, this did not necessarily mean that the desired target audiencemotherscould be reached. The oriental woman, the wife, lives in the secrecy of her apartments, far from the world, more or less hidden, inadorable (inaccessible?) (La Publicit Humoristique 1921, 20). It was advised not to give up ones aim (activit) and to search for places where one can be free, where one can act out, evolve successfully: we want to say outside, in the street (La Publicit Humoristique 1921, 20). This attitude reminds us of Weber and Sombarts thoughts on the capitalist entrepreneur, who is impatient of older, cumbersome methods of distribution and who further is unwilling to tolerate low levels of demand, no matter how strongly sanctioned by religious, social, or political custom those levels were (Weber cited in Fullerton 1988, 77).
He [the entrepreneur] will try to push over, under, around, or through restraints established by public policy, e.g., sumptuary legislation. He will seek to discover and meet existing demand, to stimulate latent demand, and even to encourage new demandbecause not to do so would be to risk the life of his business enterprise. (Fullerton 1988, 77)

As a record of an ongoing discussion about marketing practices in different regions, BMdP gives us interesting

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insights into how Nestl quickly realized from direct experience that despite stereotypes, Orientals were not all the same. Based on reports from the MVCs, Nestl recognized that just as European markets differed from one to another, there was by no means a homogenous market called the Orient, and the company could not act in Syria as it did in Turkey or in Egypt. In an article about publicit in Syria, the author points out that successful advertising will consider the mentality of the target clientele (mentalit de la clientele conquerir). Whereas the Syrians seemed backward, the Turks and Egyptians were seen as being more Westernized, and therefore, more receptive to modern advertising. To appeal to the Syrian consumer, advertising had to remain simple (La Publicit Humoristique 1921, 13, 93). Thus, while on one hand, there were assumptions about mentalit, on the other, the different circumstances (the hardly accessible home, widespread illiteracy, local customs, markets, and even recipes) played an equally significant role in creating new marketing ideas for Nestl products.

GETTING CONNECTED WITH THE OTTOMANS NESTL BECOMES TURKISH As far as Turkey was concerned, the significance of MVC activity as discussed in various issues of BMdP was how to indigenize Nestl. As head of the Constantinople MVC, Edouard Muller played a major role in this process. The importance given to sales promotional efforts for Nestl products in Turkey under his management is demonstrated by the fact that more than one employee was designated for this duty. In 1913, H. Brar was made Chef du Dpartement de la Publicit, and N. Fouad Bey held the position of Attach au Service de la Publicit (Nestle Fabrikas Kainatn Sdcsdr 1913). The employment in this department of an Ottoman Muslim points to Nestls awareness of the importance of local knowledge, the ethnic factor.2 Several advertisements clearly show how local customs and traditions were used to promote the foreign Nestl products in host context. Nestl condensed milk was often presented as a possible ingredient in traditional Turkish dishes such as mohallebi (cream dish). Advertising cartoons featured Ottoman character types such as Mirza Bey to help the Ottoman consumer identify with Nestl. Humorous stories, in which Nestl always played a central role, told about the everyday life of these figures and their families. One series of ads followed Mirza Bey during one week of his life. Mirza Bey is first depicted as a feeble person who has stomach problems. Even his servant and cat seem to be in a bad way. To revive him, each day, his servant prepares a mostly traditional dish with Nestl milk, the recipes for which are positioned above the cartoons.3 After a week, Mirza Bey, his servant, and even his cat all look well fed (La Publicit Humoristique 1921, 2425). Another cartoon depicts a corpulent man, who sits and smokes a water pipe, telling the person standing opposite that his condition is get-

FIGURE 8

THE MAN WHO NAMED HIS PIPE NESTL AND A MAN WHO REFUSES TO BUY MILK FROM THE STREET VENDOR, NESTL SUPPLEMENT, SERVET-I FNUN, 1913

ting better every day since he drinks Nestl milk. Nestl milk has made him so satisfied that he even gave his water pipe the name Nestl. Some cartoons also carried the message that the traditional way of buying milk products from street vendors was backward, and above all, unhygienic (see Figure 8). Nestl not only tried to attract the Ottoman consumers attention to sell its products, it also aimed at becoming an integral part of Turkish society. By 1914, Nestl was boasting about its more than forty-year presence in the Ottoman Empire (Kologlu 1999), demonstrating that even company history was marketable. Nestls profile was such that it became a major target of the hostile reaction to foreign companies that accompanied rising Turkish nationalism after 1908. Some letters to the editor in Ottoman dailies and journals are revealing in this respect. Long-standing and well-known foreign companies served as scapegoats for the worsening conditions of Ottoman society. Like some department stores (etinkaya 2002), Nestl

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of Republican rule, an active and ever-growing indigenous industry regularly presented its products at local fairs (yerli mal sanayi sergileri). At this time, Nestl opened its first chocolate factory in Istanbul, exhibiting its goods in local fairs next to those of Turkish companies (Direction Gnrale du Commerce 1927; see Figure 9).

CONCLUSION Nestls breast-milk substitutes, whose marketing again became controversial in the 1970s, were being actively marketed in less developed countries a full century earlier (Schwarz 2000). The controversy surrounding breast-milk substitutes then centered not on the activities of multinationals in less developed countries, as it does today, but focused on the issue of the high infant mortality in Europe, for which breastmilk substitutes were seen as one of the major causes. In its European markets, Nestl had not to worry about being a multinational corporation but rather about the development of clever marketing strategies to counter criticism of breast-milk substitutes. Nestls concerns in the Ottoman Empire, on the other hand, were not focused on spinning debates about infant mortality but on reaching consumers who, as in Europe, were modernizing yet whose cultural background was sufficiently different as to require new and local forms of advertising. Nestl first targeted the literate and better-off segment of urban Ottoman society, including ethnic minorities. Subsequently, the widespread use of billboards and other mass-media promotion techniques assured public awareness of Nestls products among all segments of Ottoman/Turkish society. Although Nestl addressed mainly the civilian Ottoman consumer, political circumstances favored a second consumer group: the Ottoman army. With the outbreak of the Balkan Wars (19111912), Nestl intensified its relationship with the Ottoman government. Because of the shortage of fresh milk, Nestls condensed milk and milk powder were to become, like weapons and railroads, a necessity for the Ottoman army. Yet, Nestls main target in the long term was not the military but the civilian Ottoman consumer. In the ever-denser atmosphere of Turkish nationalism after 1908, which gave rise to growing hostility to foreign companies, Nestl realized the importance of being perceived as a local company by the Ottoman Turks. Although facing demands for boycott against its products, Nestl made every endeavour to embark on its localization strategy by constantly observing the market and its conditions and seeking out and implementing new promotional tools for its products. Nestl understood the importance of embedding the company, its brand name, and its products within the culture and consumption patterns of the Ottoman Empire. In its efforts to rationalize all aspects of advertising, the company realized that different markets and mentalits required different approaches. It could be argued that above all, the extensive use of and search for appropriate

FIGURE 9

CONSUME LOCAL GOODS! (YERLI MALI KULLAN!)NESTL EXHIBITING IN A LOCAL FAIR FOR TURKISH COMPANIES IN THE 1930S SOURCE: Courtesy of Historical Archives Nestl, Vevey.

was thought to be serving hegemonic European interests. Paradoxically, Nestl was at the same time considered by some an exemplary company with enviable products and advertising methods. After giving detailed information about a Nestl contest in the Ottoman press, one female letter writer complained: This company, which narcotizes our palates with sweet, sweet words, which squeezes money out of our pockets . . . My god, what creatures we are! As I said before, we are a useless nation. We give all that moneyyes, stacks of money from our pockets to this company. Is there not one patriot who could establish a company, if not like Nestl than at least a smaller one? (Niyazi ve S rekas 1913, 2) She finished with an expression of resignation, stating that even if there existed Ottoman establishments, we are absolutely determined to put our money in the pockets of the Westerner. Thats just like us! (Niyazi ve S rekasi 1913, 2). Shortly after the fall of the Ottoman Empire and the establishment of the Republic of Turkey, the desire of this dissatisfied Ottoman consumer could be satisfied. With the beginning

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marketing and advertising tools was one of the essential keys for Nestls continual success in the late Ottoman Empire and in the newly founded Turkish Republic. NOTES
1. Levha is a large-scale calligraphic composition, most commonly in the cel sls and cel talik scripts, that can be framed and hung in mosques, offices, and homes (Derman 1998, 190). 2. The later director (manager) of the Istanbul office, Nissim Fahri, was an Ottoman Jew who began his career in 1913 shortly after the opening of the Constantinople MVC. It was Edouard Muller who hired Fahri. From his first position as an assistant accountant, Fahri worked his way up to chief accountant and finally became the executive director of the Istanbul branch (AHN). 3. About 1912, Procter and Gamble also advertised its product, Crisco, with regular recipe changes (Strasser 1989).

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Yavuz Kse, MA, is an assistant lecturer at the Institut for the Study of History and Culture of the Middle East whose research interests include the history of the Ottoman Empire; business, marketing, and consumption history of the Middle East; and crosscultural encounters (especially between the Western world and the Ottoman/Turkish world).

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