AKSHAY P
P17228
PGDM C
INTRODUCTION ON THE COMPANY
Nestlé's products include baby food, medical food, bottled water, breakfast cereals,
coffee and tea, confectionery, dairy products, ice cream, frozen food, pet foods, and
snacks. Twenty-nine of Nestlé's brands have annual sales of over CHF1 billion (about
US$1.1 billion), including Nespresso, Nescafé, Kit Kat, Smarties, Nesquik, Stouffer's,
Vittel, and Maggi. Nestlé has 447 factories, operates in 189 countries, and employs
around 339,000 people. It is one of the main shareholders of L'Oréal, the world's
largest cosmetics company.
Nestlé was formed in 1905 by the merger of the Anglo-Swiss Milk Company,
established in 1866 by brothers George and Charles Page, and Farine Lactée Henri
Nestlé, founded in 1866 by Henri Nestlé. The company grew significantly during the
First World War and again following the Second World War, expanding its offerings
beyond its early condensed milk and infant formula products. The company has made
a number of corporate acquisitions, including Crosse & Blackwell in 1950, Findus in
1963, Libby's in 1971, Rowntree Mackintosh in 1988, Klim in 1998, and Gerber in
2007.
FINANCIAL DATA
Financial data in CHF billions[57]
Year 2013 2014 2015 2016 2017
Revenue 92.158 91.612 88.785 89.469 89.791
Net Income 10.015 14.456 9.066 8.531 7.183
Assets 120.442 133.450 123.992 131.901 130.380
Employees 333,000 339,000 335,000 328,000 323,000
PRODUCT AND BRAND
Brand – Nescafe
Some of the main products of Nescafe are Nescafe classic, Nescafe decaf, Nescafe
gold blend, Nescafe espresso, Nescafe café menu mocha, Nescafe café menu
cappuccino, Nescafe café menu latte.
BRAND CREATION AND EVOLUTION
The unified approach to packaging design, communication and digital strategy for
Nescafé, drunk at a rate of 5,500 cups each second, will feature several key design
elements developed with new, younger consumers in mind.
These include the Nescafé red accent, taken from the modernised Nescafé brand
mark, the iconic red Nescafé mug and a stylised graphic device, the “hub” - an
aerial view of a mug of coffee.
EVOLUTION OF NESCAFE – BEFORE AND AFTER
Nescafé recently announced a massive global brand campaign that targets a
younger generation of coffee drinkers. Nescafé was created by Nestle in 1938 with
the aim to be one of the world's most distributed brands of instant coffee. Nescafé
managed to achieve that and more by becoming the global brand that it is today.
With the coffee industry becoming more competitive, Nestle recognized a need to
change their packaging design, communication and digital strategy:
The unified approach to packaging design, communication and digital strategy for
Nescafé, drunk at a rate of 5,500 cups each second, will feature several key design
elements developed with new, younger consumers in mind.
These include the Nescafé red accent, taken from the modernized Nescafé brand
mark, the iconic red Nescafé mug and a stylized graphic device, the “hub” – an
aerial view of a mug of coffee.“
Nescafe before and after logo
MARKET SEGMENT
Nescafé’s target market consists of basically coffee drinkers, especially people whom
are in the need of instant and qualified coffee that stimulates body within a day. Due
to its convenience, it is a quick solution for people who want to enjoy it at home, work
or school; accordinlgy, it targets each of them in different ways. Especially for target
segments of working individuals or students, it aims to awake them in the mornings,
sober up in the afternoons, or again keeping awake in the late evenings. Moreover,
geographically, it addresses more the west side of Turkey rather than east side in
terms of habituality. Besides, another target can be assumed which contains the
middle-aged and elderly people who get into the habit of drinking Nescafé. On the
other hand, if we think demographic variables deeply, it can be seen that targets are
more youth oriented.
SEVERAL POTENTIAL TARGET SEGMENTS:
Occupation: Students Age: 15-23
Lifestyle: Busy
Density: Urban
Personality: Ambitious, outgoing
Occasion: Seasonal (at exam times)
Benefits: Convenience
User Status: Potential user, regular user, first-time user
User rate: Light user
Loyalty Status: Medium
Occupation: Professionals Age: 23-31
Lifestyle: Western
Density: Urban
Personality: Inspired, outgoing
Occasion: In the mornings
Benefits: Quality
User Status: Regular user
User rate: Medium user
Loyalty Status: None, medium, strong
Occupation: Managers Age: 46-60
Family Life Cycle: Married w/children
Lifestyle: Hard-worker
Density: Urban
Personality: Ambitious
Occasion: Regular
Benefits: Speed
User Status: Regular user
User Rate: Heavy user
Attitude toward product: Indifferent
POSITIONING AND USP
USP-100% pure instant coffee
Before talking about Nescafe’s market positioning at first we are going know about
what’s market positioning?
Market positioning is the manipulation of a brand or family of brands to create a
positive perception in the eyes of the public. If a product is well positioned, it will
have strong sales, and it may become the go-to brand for people who need that
particular product. Poor positioning, on the other hand, can lead to bad sales and a
dubious reputation. A number of things are involved in market positioning, with entire
firms specializing in this activity and working with clients to position their products
effectively.
Although coffee drinkers are much less than 1% of the population, our survey that
considered only youngsters, shows that 9% of the youngsters are coffee drinkers.
More importantly, almost 40% drink both tea and coffee. This vast group is very
likely to get influenced in the future because of widespread media promotion of
Nescafe. All this is showing that the young generation is increasingly developing a
liking for coffee and the shift from tea towards coffee has begun.
When it comes to drinking coffee, almost 92% of the respondents answered Nescafe.
This included both the company’s product and the importers. The only other brand to
have an impact is Valentino. Valentino’s market presence is not because of taste and
recognition but because of the fact that it is served through vending machines.
Nescafe is encouraging the promotion of coffee by any other brands or distributors
because it will only broaden the growing coffee market.
1 coffee cup 1 good feeling with Nescafe, all people have known to brand in the
verities character such as, to pass love between two person, red cup, hug, happiness,
co-workers, and or so. This whole happed on Nescafe strategy. Therefore, when you
think Nescafe you will think the coffee cup. "Nescafe mug" red cup was popular.
The Red Nescafe mug is another popular symbol which associates the Brand Nescafe
with the concept sharing happiness.
BRAND POSITIONING STRATEGY
The composition of the product
The distinguishing position
Being concerned about the health of its consumers
Combination of taste with quality.
BRAND PERSONALITY AND BRAND ASSOCIATION
The Nescafé brand usually had a relation with an atmosphere of tasteful coffee
pleasure, warm and friendly. According to the article written by Reg Butler to the Tea
& Coffee Trade Journal in 1999, to match the personality of the product, advertising
for the past 10 years has concentrated on the present television theme of "the magic
world of endless pleasure" precisely targeted to the core target audience aged 17-
30. Clever visuals are used to show a transformation into a happy and trendy world
of parties and dancing with everything going well. The campaign offers stylish living
for the younger generation.
During the 80’s in Greece, for instance, Nescafé tried to differentiate promotion of
the soluble product from hot to cold. Nescafe Frappe seemed to be more related to
a world of freshness, youth, and pleasure, while Nescafe Classic wanted to target
audience aged 25 and older. Today, in Greece, the two age groups overlap, even
people in their 50s drink Frappe.
Nescafe has a wide range of products, and in some way some variables in
its personalities. But besides this variety, Nescafé has maintaining very well its
unity. Across the countries, the brand has being working to respond to all different
demands that are based indifferences about the culture of drinking coffee.
INTEGRATED MARKETING COMMUNICATIONS STRATEGY
ADOPTED FOR BRAND BUILDING AND MANAGEMENT
High engagement on Social Media-
Facebook page: 1,52,26,512 likes with 2,80,142 people talking about it
High engagement rate
Presence of a lot of fake fans
No emotional connect with the brand in terms of engagement
Lack of content that holds “Share value”
Lack on campaigns infusing people to participate
Spammy: Too many posts around “like it , hit it , tag your friends”
Contest : They asked users to share the link of their jingle and tag friends with luck deciding
the winner.
SOCIAL MEDIA –LEVERAGE #NESCAFEMOMENTS
Facebook: The stories collected from our influencers will be used to invite entries
across social forums.5 of the best entries of every day would make it as pictures with
the content on it for the next day.
Twitter: The twitter campaign will be similar to the Facebook one centered around
#Nescafe moments .
Instagram: In the age of #instamoments we would invite entries about #Nescafe
memories via hashtags on Instagram , the best selected pictures out of the hashtags
will later find space in that week’s Nescafe Basement . The show would have a
marquee of these pictures during the first and the last 10 minutes
BRAND EQUITY AND BRAND VALUE
This will help to analyze brand equity and value of Nescafe via different factors
Brand Associations
Nescafé is attached to the people and the environment through its products and work.
Nestlé launched a Nescafé Plan in 2010. The purpose of this plan is to improve
coffee farming, production and utilization methods throughout the procedure.
Following Nescafé Plan, agriculturalists created modern tools for farmers to protect
the environment, increase growth and improve the quality. Nescafé has also
introduced technical training programs for farmers to improve farming practices. It
makes use of safe packing which keeps products intact for a long time. Nescafé cares
about everyone associated with it hence it provides funding schemes to farmers for
better life and education system.
Brand Awareness
Nescafé promoted its brand to appeal more coffee drinkers from the whole
generations. It made promotions from marketing campaigns of giving red mugs to
painting an airplane into red color in Ecuador. The TV advertisement, Gold Blend
couple, also played a central role to attract young coffee fans. Nescafé ran a
campaign in 2009 focusing on the coffee’s quality with a tagline Coffee at its
brightest. Nescafé gives free samples with other products, uses print media channels
and social media platforms to connect with the world. Nescafé signed a sponsorship
deal with Bauer Media and its morning shows. Magic 105.4 plays out Nescafé ads at
the start of its program and announces many prizes for competition winners.
Brand Loyalty
Nescafé is the world’s top coffee company. It has almost 170 different variants
available globally. Around 4600 cups of Nescafé coffee gets consumed every
second in the world. It got great success during World War II when US Army
preferred drinking this coffee over others. Nescafé got ranked on 25th position for
the most valuable brands in the world. It made sales in 2009 of over 10.78 billion.
Later, it got reintroduced with a brand name Nescafé Taster’s Choice. Nescafé gives
people flexible choices to drink coffee having the energy and an excellent taste.
Brand Assets
Nescafé is the world’s 2nd largest beverage company. Its headquarters is in
Switzerland. It comes in various forms, from premium to non-premium items. Nescafé
launched the new coffee machine, Dolce Gusto in 2006 which can be used to make
many types of coffees. Nescafé sells products including classic, azera, sunrise, 3in1,
frappe, cafe menu, cap colombie, alta rica, kenjara, decaf, espresso, cappuccino,
green blend, blend 43, gold, short black, and protect.
Brand Elements
Nescafé is an instant coffee brand of Nestlé Company. This brand is named Nescafé
from the combination of the words Nestle and Café. A French advertising company
designed the logo with complete brand name on it. In the logo, N’s stroke covers
every letter to show unity and the use of bold and influential letters represent the
strength of its quality. From the beginning, the logo kept on getting modified mostly
regarding color scheme. With a tagline It all starts with a Nescafé, the brand
stimulates and refreshes the people right from the first sip to make their day amazing
BRAND VALUE
KEY ISSUES AND CHALLENGES
NESCAFÉ has been focusing on an emotional marketing approach as opposed to the
rational approach highlighting the quality of NESCAFÉ’s coffee. This core message of
quality has been lost on current consumers, leading to lower consumer perception of
quality. In addition, the emotional marketing approach has been inconsistent and the
core message scattered, causing consumers to have a neutral or lack of emotional
engagement with NESCAFÉ.
KEY ISSUES AND CHALLENGES
Within the instant coffee category quality of nescafe coffee is perceived as being
better than that of super of owl parallels however have to be drawn between
nescafe coffee and that sold in coffee chair and other speciality stores especially
since coffee chairs are entering in the instant coffee category.
The weak breath of brand salience: nescafe appears to be excelling at the depth of
brand salience within the instant coffe product category. However, brand does not
surface in consumers mind as easily or frequently in general coffee purchase and
consumption situations.
The lack of strong, unique and favourable association linked to the brand nescafe
was generally described as a brand consumers where neutral about even though they
are aware of nescafe the brand held little importance or significance to them.
Although a significant propotion of nescafe current consumer come from the younger
target segment mainly students . They do not share a strong relationship with the
brand. So mainly desk bound employees share a good relationship with nescafe
while the students relationship is just a fling.
SUGGESTIONS TO OVERCOME ISSUES AND
CHALLENGES.
Evaluate consumers perception of the quality of nescafe coffee by revisiting the
functional aspects of our products before trying to establish resonance through the
emotional aspects. Quality should be a relevant point of parity to both the instant
coffee market and the coffee market as a whole.
Increase the brand usage of nescafe for more situations by showing situations that
consumer can use nescafe instead of just limiting it to instant coffee.
Create a brand story that differentiates nescafe from other competitors for example
warm, comforting etc
Targeting the younger segments and creating best friendship brand relationship since
these segments have the highest expected future growth and will thus have a higher
marginal impact on brand equity of nescafe.
