NESCAFE

Nescafe background, market trends, products,4p's,

1. Group-3 Pramit J ain-20DM154 Priya Thukral-20DM160 Raju Kumar-20DM167 Rishabh Kumar Das-20DM173 Rohith Rajeev-20DM180 Sanjay P areek-20DM187 MARKETING MANAGEMENT PROJECT

2. NESCAFÉ

3. Coffee Industry Background In the mid-19th century,  coffee rust  reached India and began infecting the  A rabica trees . By  1869 , the rust had become an epidemic. As a reaction to this, many of the farmers replaced the arabica trees with  R obusta , or a rust-tolerant hybrid variety of arabica tree. These more resistant trees are still commonly grown in India There are over 1, 71,000 coffee farms in India, cultivating nearly 900,000 acres of coffee trees. Most coffee production in India is on small farms, with over 90 percent of all farms consisting of 10 acres or fewer. However, such farms account for just over half of all land used for coffee production and a minority of all coffee produced. Most coffee in India is grown in three states: Karnataka, Kerala, and Tamil nadu .

4. ▪ Coffee sees retail value grow by 10% in current terms in 2019 to reach INR52 billion, while volumes rose by 6% to 70,663 tonnes . ▪ Coffee benefits from introduction of the GST. ▪ Volumes grow faster in foodservice than retail during the year, supported by rising disposable incomes and busy consumer lifestyles. ▪ Coffee is expected to see retail value increase with a 10% CAGR in current terms (5% at constant 2019 prices) over 2019-2024, with a volume CAGR of 6%. Market Trend of Coffee *Data Source: Euromonitor

5. NESCAFÉ- INDIA Brand Name- Nescafe Parent Company – Nestlé Product Type – Coffee Launch of Nestle in India- 1956 Launch of Nescafe in India – 1963 Head office – Gurugram, Haryana Tagline – It all starts with a NESCAFÉ

6. Nescafe Products NESACFE ORGINALS -8TYPES NESCAFE GOLD -13 TYPES NESCAFE AZERA-9TYPES NESCAFE COFFEE BAGS -2 TYPES NESCAFE DAIRY ALTERNATIVES -3 TYPES NESCAFE ORIGINS-5 TYPES NESCAFE NITRO -3 TYPES NESCAFE DECAFF-6 TYPES NESCAFE IN 1 PACK-3 TYPES NESCAFE FROTHY COFFEE -17 TYPES NESCAFE SPECIAL EDITION -2 TYPES NESPRESSO

7. Four P’s of Marketing Product Nescafe have a huge set of products, which is mainly aimed to satisfy the customer taste buds.  Nescafe introduced various blends of coffee, which is their marketing mix products strategy The demographic need of customers are also kept into consideration

8. Price Nestle has adopted the strategy of non-price competition . The price of products are dependent on the quality of the material supplied by the company. The volume offered to the customers were varied as was the price.  The sachets are available at a reasonable price. The various flavours of Nescafe coffee are made available at various quantity and their prices also set according to the packing.

9. Place NESCAFE products can be found almost everywhere from small stores to supermarkets. Nestle company follows the FMCG strategy of distribution. This is quite effective because it involves breaking the bulk in a typical distribution channel . The two channels are :- Manufacturing- C&F agent-Distributors Retailer Manufacturing- Bulk buyers-Consumers

10. Promotion Nescafe emphasises on the promotion of products in all different kinds of way. Nescafe make the products advertise through radio, television, papers, PR activity, newspaper, internet, etc. The advertisement of Nescafe also are innovative and make sure that they catch the attention of the customers and they kind of get attracted to the products.

11. Factor Influencing Consumer Behaviour Cultural factors Personal factors Psychological factors Social factors

12. Cultural factors Cultural “coffee or tea?”. Most of Indians prefer tea over coffee. In India coffee culture is increasing at 5% per year . Nescafe is trying to attract the youth culture dominantly. Subculture People in North India prefer “instant coffee” while in southern India they prefer roasted bean coffee. Social class It is homogenous ,hierarchically ordered and those who share same values , interest and behaviour. High end customer prefer Nespresso while lower or middle end customer prefer instant or classic coffee .

13. Personal Factor Lifestyle People believe that coffee consumption is an indicator of rich and prosperous standard of living. Personality and self concept Nescafe users feel confident ,advertisement of Nescafe are trying to project users of it as optimistic and achievement oriented and same is perceived by people. Occupation and economic circumstances From households to working as well as students are being targeted by Nescafe and are influenced by it. Age group Nescafe primary customers are youth of India. Secondary customers are middle aged and old people. Potential customer are teenager and children.

14. Psychological factor Consumer sometimes buy products not because of functional benefits but also psychological benefits attached to it. Motivation People seek a good taste , keeps you fresh and switched on. Nescafe tries to satisfy all. Needs are biogenic(arise from physiological state) and psychogenic (arises from psychological state). Learning It is change in behaviour arising from personal experience. People experience the success of Nescafe once they try it , they began to use more and more.

15. Perception Consumer perceive many things through their senses i.e. power of sensory marketing and it affect their perception and behaviour. { when you hear Nescafe ,you sense the feeling of comfort ,relaxing and improved efficiency .} Beliefs and attitudes Most of Nescafe consumers believe that this brand is best amongst its competitors. Nescafe is also convincing each customer that they feel better with Nescafe coffee through various promotional events.

16. Social factor Family Family of orientation(parents and siblings) Family of procreation(person’s spouse and children) During the period of 50s and 60s Nescafe promoted family oriented values ,in their advertisement family gathered over a cup of coffee after meal. Reference group If someone who get appreciated drinks Nescafe and consumers see them ,it will affect their choice of drinking. Role and status It consists of activities a person is expected to perform. High role group prefer nutritious, brand name, quality of coffee which appeals to their senses while lower role group think about taste and quality only.

17. Holistic marketing Value exploration Value exploration means how organizations can identify new  value  opportunities . In the value exploration part Nescafe brought out the instant coffee mix into the market to the customers who wish to have coffee instantly. As you can see from the responses Nescafe has explored the market very well.

18. Value creation Nescafe brought its value creation by introducing new products into the market based on all the factors that can influence the customer needs.

19. Value delivery Around 200 people were part of our survey and we analysed that Nescafe was able to deliver all the values which are conveyed in terms of taste , social gathering and productivity.

20. Major Competitors Bru Tata Coffee Davidoff BlueTokai Lavazza Starbucks

21. Nescafe Vs Competition Product Type Company's Product Competition's Product Instant Coffee Nescafe Classic, Gold, Sunrise, Bru- Green Label, Instant, Superstrong gold, Exotica Illy Tata Coffee-Grand Lavazza Caffe- Espresso Premixes Nescafe Cappuccino, Vanilla Latte, Choco Mocha Wagh Bakri- coffee premixes Girnar Instant Premix Bru Premix Coffee-3 in 1 Pods Nespresso Fresh & Honest Beans Nescafe whole beans Lavazza Puro Gusto Cafe Coffee Day Coffee Beans Starbucks Fresh & Honest Ready to Drink Nescafe- Intense, Chilled Latte, Hazelnut Starbucks- Frappuccino, Iced Cofee Amul Mother Dairy

22. Share of Mind

23. Market Share

24. SWOT Analysis Strength: Brand Name Innovation Wide variety & flavours of products Promotion Quality Product Weakness: Many people avoid caffeine because of health reason Inclination towards tea Opportunity: Reasonable product for rural areas and developing cities Changing lifestyle of working people helps to increase the sales Threats: Café outlets & Local Coffee shops Major competition from brand like bru and tata coffee

25. Geographic : Metropolitan Cities & the Emerging markets of other cities Demographic : 1.Occupation – Students 2. Age – (15-24) yrs Psychographic : 1.Busy lifestyle 2.Ambitious, outgoing personality Behavioural : Convenient & keeps them alert Preferred specially during exam times Light user, First time user Medium Loyalty Segmentation

26. Geographic : Metropolitan Cities & the Emerging markets of other cities. Demographic : 1.Occupation – Professionals 2. Age – >24yrs. Psychographic : 1.Busy lifestyle 2.Inspired, outgoing personality 3.In the morning & office 4.In the café Behavioural : Quality & efficiency at work Medium to Frequent user Sharing special moments Medium to High Loyalty

27. Targeting NESCAFÉ primary target markets are coffee drinkers, specifically those who are looking for a quick solution to quality coffee People that want to enjoy their coffee without any hassle/ready in a jiffy, all in the comfort of their own home. NESCAFÉ offers coffee that can be enjoyed everywhere at your convenience Past Nescafe was targeted to morning people. Presently Nescafe is targeting the Youth. According to Andrew Ward (Worldwide account Director) of Nescafe has launched a $30 million global campaign, specifically aimed at 16-24 years old.

28. Positioning Nescafe uses  P roduct differentiation  and  I mage differentiation  in order to gain competitive advantages to build a position by providing superior value compare to competitors. For example : Nescafe Gold cappuccino Rich & frothy Taste Aimed at Ambitious people who want to be remembered Crafted with Care for Moments that matter Nescafe Cold coffee Refreshing & Relaxing Aimed at working class & also for ones who wants to make their coffee in least time as possible. For the young generation who hardly spends time at kitchen when at home. Nescafe Sunrise Aimed at southern India Nescafe Latte Aimed at millennials & busy professionals who often studies & works till late night & then have early morning commitments The cup that gets you going

29. TVC & Print Advertisement

30. Consumer Survey

31. Customer Feedback I prefer Nescafe over other coffee brands mostly because I’m so used to it. Also i don’t want to ruin my coffee time trying out others because I really enjoy having Nescafe . – Amit Pant I prefer Bru over Nescafe because of the following reasons .Being a Product of HUL it has a strong distribution channel making it readily available in Market than Nescafe. Bru offers a wide variety of flavors at lower price than Nescafe .Being Health conscious I vote Bru over Nescafe because Nescafe contains caffeine whereas Bru doesn't . Moreover being a supporter of Make in India campaign I support Bru which is owned by India based HUL rather than Nescafe which is Swiss based. - Rakesh Krishnan In my family Nescafe is like a synonym for coffee because we have been using it since as long as I can remember and hence I prefer Nescafe. – Aarathi Biju

32. Conclusion Nescafe contains high dosage caffeine in comparison to Bru. For that reason the segment of the consumers who don’t like caffeine or are first time users of coffee are left untapped by Nescafe whereas Bru has targeted them with Bru Lite. Bru Instant coffee is India’s first chicory mixed coffee which is largely preferred in southern India & Nescafe hasn’t been able to make an impact in that market although they launched Nescafe Sunrise. Chicory has its own Nutritional benefits. Since Nescafe products are 100% pure coffee, they are priced slightly more compared to Bru & other competitors. So affordability becomes an issue for frequent/daily coffee consumers. Nescafe misses out on giving the experience which other competitors provide from their coffee retail outlets like Starbucks, Café Coffee Day. Limitations:-

33. HUL has a very strong distribution channel compared to Nestle. Truck size standardization, Non-Containerized movement is a point of Concern for the logistics team. They are exploring the option of Double deep system of stacking. The taste of Nescafe in comparison to others is not very dark, so it looses out on potential coffee lovers.

34. Suggestions They should launch their international products in India like Nespresso and Nescafe Whole Beans so that they can target larger segment of consumers. They should try to promote more in southern part of India to be at par with the competition. They should try to increase their number of Nescafe Cafes so as to provide consumer an experience rather than just a product. They should try to introduce low cost small size sachets of 1 INR in rural areas so as to capture the major part of India. They should try repositioning strategies in India like the REDvolution movement which it did in the international markets in 2014

35. Thanks! Don’t forget to have your NESCAFÉ today!

36. BCG Matrix The Boston Matrix is a model which helps businesses analyse their portfolio of businesses and brands. The Boston Matrix is a popular tool used in marketing and business strategy. STAR NESCAFE QUESTION MARK KITKAT CASH COW MAGGI DOG MILKYBAR MILO MARKET GROWTH RELATIVE MARKET SHARE