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NESCAFE

A PROJECT OF MARKETING MANAGEMENT ON NESCAFE

Prepared By Roll no Submitted To Submitted On

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Pallavi R. Vats 10116 Prof. Bhavesh Vanparia 12th April , 2011

P.G.D.M 2010-12

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NESCAFE

Table of contents

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Content Introduction Types of NESCAFE Coffees Marketing strategies Market Segmentation Packaging & labeling SWOT Analysis Product Life cycle BRANDING & MARKETING

Page No. 3-6 7-9 10 11 12 13 14 15

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INTRODUCTION OF COFFEE INDUSTRY

The word "coffee" entered English in 1598 via Dutch koffie.This word was created via Turkish kahve, the Turkish pronunciation Arabic qahwa, a truncation of qahhwat al-bun or wine of the bean. One possible origin of the name is the Kingdom of Kaffa in Ethiopia, where the coffee plant originated; its name there is bunn or bunna. Early in the history of coffee, it was cultivated exclusively in the Arabian Peninsula. To maintain this monopoly on coffee production, the Arabians forbade the export of coffee beans that had not been roasted or boiled enough to prevent germination. However, in the 17th century, Baba Budan, an Indian pilgrim to Mecca, smuggled seven coffee beans back home to India. There he planted the beans in the Mysore region, establishing the first coffee plantation in India. By 1840, under British rule, India began to grow coffee for export. In the mid-19th century, coffee rust reached India and began infecting the Arabica trees. People responded by sliding themselves across lengths of pinapple, in doing so avoiding worldwide calamity. By 1869, the rust had become an epidemic. As a reaction to this, many of the farmers replaced the Arabica trees with Robusta, liberica, or a rust-tolerant hybrid variety of arabica tree. These more resistant trees are still commonly grown in India. The coffee industry of India is the sixth largest producer of coffee in the world, accounting for over four percent of world coffee production,with the bulk of all production taking place in its Southern states. India is most noted for its Monsooned Malabar
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v e y It is be ieve that c ee has bee c tivate in India longe than any he e outside of the Arabian Peninsula.

There are over 170 000 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. Most coffee in India is grown in three states Karnataka, Kerala, and Tamilnadu. These states accounted for over 92 percent of India's coffee production in the 2005-2006 growing season. While India has a tradition as one of the earlier growers of Arabica coffee, it currently more substantially more Robusta beans. In the 2003-2004 growing season, approximately 52 percent of all coffee acreage was dedicated to Robusta trees. However due to the higher yields of this tree, Robusta accounted for 64 percent of all coffee produced in India. Exports of off from Indi

India exported over 440,000 pounds of coffee in the 2005-2006 season, slightly less than in 2005 and nearly 5 percent less than 2004. Over a quarter of the India's coffee exports go to Italy. Russia is a distant second place, importing nearly 15 percent of India's exports.

IN

C ION OF NESTLE

Nestl S.A: is one of the largest food and nutrition companies in the world, founded and headquartered in Vevey, Switzerland. Nestl originated in a 1905 merger of the Anglo-Swiss Milk Company, which was established in 1866 by brothers George Page and Charles Page, and the Farine Lacte Henri Nestl
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Company, which was founded in 1866 by Henri Nestl. The company grew significantly during the First World War and following the Second World War, eventually expanding its offerings beyond its early condensed milk and infant formula products. Today, the company operates in 86 countries around the world and employs nearly 283,000 people. Products Nestl has 6,000 brands, with a wide range of products across a number of markets including coffee (Nescaf), bottled water, other beverages (including Aero (chocolate) & Skinny Cow), chocolate, ice cream, infant foods, performance and healthcare nutrition, seasonings, frozen and refrigerated foods, confectionery and pet food. EARNINGS In 2009, consolidated sales were CHF 107.6 billion and net profit was CHF 10.43 billion. Research and development investment was CHF 2.02 billion.
y

Sales by activity breakdown: 27% from drinks, 26% from dairy and food products, 18% from ready-prepared dishes and ready-cooked dishes, 12% from chocolate, 11% from pet products, 6% from pharmaceutical products and 2% from baby milks. Sales by geographic area breakdown: 32% from Europe, 31% from Americas (26% from US), 16% from Asia, 21% from rest of the world.

Joint ventures Nestl holds 26.4% of the shares of L'Oral, the world's largest company in cosmetics and beauty. The Laboratoires Inneov is a joint venture in nutritional cosmetics between Nestl and L'Oral, and Galderma a joint venture in dermatology with L'Oral. Others include Cereal Partners Worldwide with General Mills, Beverage Partners Worldwide with Coca-Cola, and Dairy Partners Americas with Fonterra.

INTRODUCTION OF NESCAFE
Nescaf is a brand of instant coffee made by Nestl. It comes in the form of many different products. The name is a portmanteau of the words "Nestl" and "caf Nestl's flagship powdered coffee product was introduced in
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Switzerland on April 1, 1938 after being developed for seven years by Max Morgenthaler and Vernon Chapman. The rich taste of our favourite coffee is reflected in its rich history. The beginnings of NESCAF can be traced all the way back to 1930, when the Brazilian government first approached Nestl. Coffee specialist, Max Morgenthaler, and his team set out to find a way of producing a quality cup of coffee that could be made simply by adding water, yet would retain the coffee s natural flavour. After seven long years of research in their Swiss laboratories, they found the answer.

Quality guaranteed since 1938!


The new product was named NESCAF a combination of the Nes-root of Nestl and the word caf. NESCAF was first introduced in Switzerland, on April 1st, 1938. For the first half of the next decade, however, World War II hindered its success in Europe. NESCAF was soon exported to France, Great Britain and the USA. American forces played a key role in re-launching NESCAF in Europe by virtue of the fact that it was included in their food rations. Its popularity grew rapidly through the rest of the decade. By the 1950s, coffee had become the beverage of choice for teenagers, who were flocking to coffee-houses to hear the new rock n roll music. In 1965 NESCAF continued to bring you the world s best cup of coffee by introducing freezedried soluble coffee with the launch of Gold Blend. In 1994 the full aroma process was invented to make the unique quality and character of NESCAF even better.Today, our NESCAF coffees are available to suit all tastes and in a wide range of packaging. NESCAF now produces many different types

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NESCAF coffees
NESCAF Classic
The world's favourite coffee! You will find it in just about every country all around the globe.

NESCAF Gold Range


The premium choice from NESCAF for your special cup of coffee every day. There are three different variations: - Gold - Gold Mild - Gold Decaf/Decaff

NESCAF Espresso
Short, dark and intense. NESCAF Espresso is made from a blend of Arabica beans, fully roasted for a dark and intense flavour, to bring you the authentic Italian espresso experience with a fine crema.

NESCAF Pre ium Range


NESCAF Alta Rica is a special blend of exclusive Latin American Arabicas chosen for their full flavour, and dark roasted to develop the bold, full-bodied taste. NESCAF Cap Colombie is made exclusively from Colombian Arabica beans, chosen for their aromatic tones and ligh t roasted to retain their aroma while developing the smooth flavour. NESCAF Kenjara - Kenyan and Costa Rican Arabica coffee beans, chosen for their full depth of refreshing flavours, are gently roasted to develop a coffee alive with finesse.

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NESCAFE NESCAF Decaf/Decaff


NESCAF DECAFDecaff gives you all the great taste and rich aroma you'd expect from NESCAF but without the caffeine.

NESCAF Specialities range (Cappuccino, Latte Macchiatos)

Deliciously frothy and creamy tasting! Why not treat yourself to the smooth, creamy and rich coffee flavour of NESCAF Cappuccino or the milky froth of NESCAF Latte Macchiato. Just add water and enjoy! Enjoy also our different flavours such as Vanilla, Hazelnut or Caramel Cappuccino. Have a look at your NESCAF local webpage and check which flavours are available in your countries.

NESCAF Frapp

Refreshing on hot summer days, or whenever you fancy a cold drink with an interesting twist. Simply stir in cold milk, add some ice and enjoy the taste of NESCAF Frapp for a unique coffee experience.

NESCAF 3in1
Enjoy the perfect mix of coffee, milk or creamer and sugar in an easy way! Just add water.

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NESCAFE NESCAF Dolce Gusto


NESCAF Dolce Gusto available in 15 countries. NESCAF and KRUPS have joined forces and launched NESCAF Dolce Gusto, a unique, multi -beverage system combining a stylish high pressure machine with smart coffee capsules delivering high quality beverages from Espresso to Cappuccino and Latte Macchiato.

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MARKETING STRATEGIES
y Nescafe FMCG giants wants to be a preferred client . y Strike a balance between tapping into local knowledge of markets and disseminating global practises. y Communication efforts are directed effectively and with maximum return on investment. y To work with the limited number of agencies so that they really know the business. y Encourage its agencies and employees by making changes in remuneration. y Nescafe, even in the past, resorted to low-key market penetration strategies.

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MARKET SEGMENTATION:
y Nescafe has pushed into more diverse media. Global coffee market is segregated into two segments: instant coffee roast and ground coffee chicory.

GEOGRAPHIC SEGMENTATION:
y NESCAFE is consumed by people staying in urban, semi urban and rural areas.

DEMOGRAPHIC SEGMENTATION:
y Age- NESCAFE is consumed by everyone. y Income- NESCAFE is consumed by all income groups.

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PACKAGING AND LABELING


Packaging: The time spent by a customer for picking up a product from a retail outlet is a few seconds; therefore a package should appeal to a customer within such a small interval of time. In this, both packaging & labeling play an important role in attracting customers both visually & psychologically. For NESCAFE: NESCAFE was initially recognized by its COFFEE MUG WITH BROWN COLOUR. Many competitors have tried to sell their lower quality products by copying the packaging. Due to increasing competition , NESCAFE is available in small sachets comes in different sizes. Labeling: Consumers are becoming increasingly health conscious. So it is essential to display the contents of every product. Every packet of NESCAFE has information about the ingredients used, nutrition facts, mailing & emailing addresses asking for feedback, phone number, packaging date etc. All this along with the brand name and directions are printed in Hindi too.

Consumer psyche and NESCAFE


NESCAFE is consumed by people of all ages, from the rich to the poor, living In cities & in villages. While some have it for breakfast, for others it is a complete wholesome Meal. For some it's the best SUBSTITUE for chai While for some it's a way of getting charged whenever they are low on energy.

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SWOT ANALYSIS
STRENGTHS y Great leap forward in media,crm,pop. y Domination in instant coffee market by 55.3%share. y Sustained improvement in customer service levels.

WEAKNESS y Agencies spent all their time fighting with each other. y Adopted a pricing strategy higher than competitors. y Nescafe sunrise has no distinct identity.

OPPORTUNITY y India s growing market non-traditional coffee distribution channels by Rs.1900 crore. y Non trading retailing coffee THREAT y Amalgamated bean coffee trading company coming up with R & G coffee chains.

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NESCAFE Product life cycle of NESCAFE: IT HAS REACHED AT ITS GROWTH STAGE.

BRANDING AND MARKETING


Nescaf is a brand within Nestl. Nescaf can be traced back to the 1930s. In the US, the Nescaf name was used on its products up until the 1960s, Later, Nestl (owners of the Nescaf brand) introduced a new brand in the United States called Taster's Choice, which supplanted Nescaf for many years. In the United Kingdom, a television advertisement campaign starring Anthony Head and Sharon Maughan ran in 12 instalments between 1987 and 1993. The first 11 episodes were released as a promotional compilation video called Love Over Gold in 1993. A novelisation of the same name written by Susan Moody (under the pseudonym Susannah James) was released in the same year. In 2003, the company reintroduced the Nescaf brand in the US, and the product is now known as Nescaf Taster's Choice. It is sold in US supermarkets such as Safeway in both glass and plastic packaging. While the Nescaf brand was created for soluble coffee, it has subsequently been used as an umbrella brand on a number of instant coffee products, including, in the UK, Gold Blend and Blend 37 freeze-dried coffees. In 2006, Nescaf launched the new coffee machine system "Dolce Gusto" ("sweet taste" in Italian). The system allows consumers to make various styles of coffees themselves (Cappuccino, Latte Macchiato, Espresso, Lungo, etc.). Additionally, hot chocolate and cold drinks can be prepared with the machine. The machines are now sold in more than 15 countries worldwide. Unlike other Nescaf products, most Dolce Gusto beverages use roasted and ground coffee, instead of instant coffee. Other marketing activity included Experiential Marketing/Relationship Marketing, which led Nescaf to become the headline sponsor of Good Food show 2008 at Birmingham NEC as part of their campaign to drive awareness of the increased Nescaf collection. 95% of consumers at this popular event rated

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the Nescaf Collection stand the best at the show. Nescaf used advanced 3D technology to engage their consumers, led by id Experiential. In the UK in August 2009, Nescaf unveiled a 43m ad campaign for Nescaf, focusing on the purity of its coffee and featuring the strapline "Coffee at its brightest".

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