NESCAFE

A
PROJECT
OF
MARKETI
NGMANAGEMENT
ON
NESCAFE

Pr
epar
edBy : Pal
l
avi
R.Vat
s
 Rol
lno : 10116
 Submi
tt
edTo : Pr
of.Bhav
eshVanpar
ia
 Submi
tt
edOn : 12thApr
il,
2011

P.
G.D.
M 2010-
12

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 NESCAFE

Tabl
eofcont
ent
s

Sr
.No Cont
ent Page
No.
1 I
ntr
oduct
ion 3-
6
2 Ty
pesofNESCAFE 7-
9
Coff
ees
3 Marketi
ng 10
st
rategi
es
4 Mar
ket 11
Segmentat
ion
5 Packagi
ng& 12
l
abeli
ng
6 SWOTAnal
ysi
s 13
7 Pr
oductLi
fecy
cle 14
8 BRANDI
NG& 15
MARKETING

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 NESCAFE

I
NTRODUCTI
ONOFCOFFEEI
NDUSTRY

Thewor d"coff
ee"enteredEngl ishi
n1598v iaDutchkoffi
e.Thi
s
wordwascr eatedviaTur kishkahve,t
heTurkishpronunci
ation
Arabicqahwa, at r
uncationofqahhwatal -
bunorwi neofthe
bean.Onepossi bl
eorigi
noft henamei st
heKi ngdom ofKaffa
i
nEt hiopia,wherethecof feeplantor
igi
nated;it
snamet hereis
bunnorbunna.

Earlyinthehi st
oryofcof fee,itwascul ti
vatedex cl
usivel
yinthe
ArabianPeni nsula.Tomai nt
ai nthismonopol yoncof fee
production,theAr abiansforbadet heexportofcoffeebeans
thathadnotbeenr oastedorboi ledenoughtopr event
germinat i
on.Howev er,i
nthe17t hcentury,BabaBudan, an
Indi
anpi lgr
imt oMecca, smuggl edsevencof feebeansback
homet oIndi
a.Ther eheplant edt hebeansint heMy soreregion,
establi
shingt hefirstcoff
eepl antati
oninIndia.By1840, under
Brit
ishrule,I
ndiabegant ogr owcof f
eeforex port.

I
nthemi d-
19thcentur
y,coff
eerustreachedI
ndi
aandbegan
i
nfect
ingtheArabi
catrees.Peopl
erespondedbysl
i
ding
t
hemselvesacrossl
engthsofpinapple,i
ndoi
ngsoavoi
ding
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 NESCAFE

worldwi decal amity

.By1869, t
her usthadbecomeanepi demic.
Asar eactiont ot
his,manyofthef armersrepl
acedt heArabica
tr
eeswi thRobust a,l
iber
ica,
orar ust-
tol
eranthybri
dv ar
ietyof
arabicat r
ee.Thesemor eresi
stanttreesaresti
l
l commonl y
growni nI ndia.

Thecof feeindust r
yofIndiaisthesixthlargestproducerof
coffeeinthewor ld,accounti
ngforov erfourpercentofwor l
d
coffeeproduction,wit
hthebulkofal lproducti
ontakingplacein
i
t sSouthernstates.Indi
aismostnot edf oritsMonsooned
Mal abarvari
ety.Itisbel
ievedthatcoffeehasbeencul ti
vatedin
Indi
al ongerthanany whereoutsideoft heArabianPeninsula.

Ther
eareover170,000coffeef
armsi nIndi
a,cul
ti
vati
ngnearly
900,
000acr
esofcof feet
rees.Mostcoffeeproduct
ioninIndi
a
i
sonsmallfar
ms, withover90percentofall
farmsconsisti
ng
of10acr
esorfewer .

Mostcoff
eeinIndi
aisgrowninthreestat
es:Karnat
aka,Keral
a,
andTamil
nadu.Thesestat
esaccountedforover92percentof
I
ndia'
scoff
eeproduct
ioninthe2005-2006growi
ngseason.

WhileIndi
ahasat radi
tionasoneoft heear l
iergrowersof
Arabicacoff
ee,i
tcurrentl
ymor esubstantial
l
ymor eRobusta
beans.Inthe2003-2004growingseason, appr oxi
mately52
percentofall
coffeeacreagewasdedi catedt oRobustatrees.
Howev erduetothehigheryiel
dsofthistree, Robusta
accountedfor64percentofallcoff
eepr oducedi nIndi
a.

Expor
tsofcof
feef
rom I
ndi
a

Indi
aexport
edov er440,
000poundsofcoffeeinthe2005-
2006
season,
sli
ghtl
ylessthanin2005andnearly5percentl
essthan
2004.OveraquarteroftheI
ndia'
scof
feeexportsgotoIt
aly.
Russiai
sadistantsecondplace,
import
ingnearl
y15percentof

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 NESCAFE

I
ndi
a'
sexpor
ts.

I
NTRODUCTI
ONOFNESTLE

NestléS.A: i
soneoft helargestfoodandnut ri
ti
oncompani esi nthe
world,foundedandheadquar t
eredinVev ey,Switzerl
and.Nest l
é
ori
ginatedina1905mer geroft heAnglo-SwissMi lkCompany ,which
wasest abli
shedi n1866bybr othersGeor gePageandChar lesPage, and
theFar i
neLact éeHenriNestl
éCompany ,whichwasf oundedi n1866by
Henri Nestl
é.Thecompanygr ewsigni f
icantl
yduringtheFirstWor l
dWar
andf oll
owingt heSecondWor ldWar ,eventuall
yexpandingitsof feri
ngs
beyondi tsearl
ycondensedmi l
kandi nfantformulaproducts.Today ,
the
companyoper atesin86count r
iesaroundt hewor l
dandempl oy snearly
283,000peopl e.

Pr
oduct
s

Nest l
éhas6, 000brands,withawi derangeofpr oductsacr ossanumber
ofmar ketsincludi
ngcoffee(Nescaf é)
,bottl
edwat er,otherbever
ages
(i
ncludingAer o(chocol
ate)&Ski nnyCow) ,chocolat
e, i
cecr eam,
inf
ant
foods,performanceandheal thcarenutri
ti
on, seasoni
ngs, f
rozenand
refr
igerat
edf oods,conf
ectioneryandpetf ood.

EARNI
NGS

I
n2009,consoli
datedsal
eswereCHF107.
6bil
li
onandnetpr
ofi
twas
CHF10.
43bi l
l
ion.Resear
chanddevel
opmenti
nvest
mentwasCHF2.02
bi
ll
i
on.

 Salesbyacti
v i
tybreakdown: 27%f r
om drinks,26%from dairyand
foodproducts,18%f rom r
eady -
prepareddishesandr eady-
cooked
dishes,
12%f rom chocolate,11%f r
om petpr oduct
s,6%f r
om
pharmaceuti
cal productsand2%f r
om babymi l
ks.
 Salesbygeogr aphicareabreakdown: 32%f r
om Europe,31%f rom
Amer i
cas(26%f rom US),16%f rom Asia,
21%f r
om restofthe
wor l
d.

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 NESCAFE

Joi
ntv
ent
ures

Nestléhol
ds26. 4%oft hesharesofL'Oréal,
thewor ld'
slargestcompany
i
ncosmet icsandbeaut y.TheLaboratoir
esInneovi sajointv entur
ein
nutri
ti
onalcosmet i
csbetweenNest l
éandL' Or éal
,andGal dermaaj oi
nt
venturei
ndermat ologywithL'
Oréal
.Ot hersincludeCereal Partner
s
Wor l
dwidewithGener alMil
ls,
BeveragePar t
ner sWor l
dwidewi t
hCoca-
Cola,andDairyPartnersAmericaswithFonterr a.

I
NTRODUCTI
ONOFNESCAFE

Nescaféisabr andofi nst

antcof f
eemadebyNest lé.Itcomesi nthe
for
m ofmanydi ff
erentproducts.Thenamei sapor t
manteauoft he
’
words"Nestl
é"and"caféNestlé'sfl
agshi
ppowderedcoffeeproductwas
i
ntroducedinSwi t
zerl
andonApr il1,1938afterbeingdevelopedfor
sevenyearsbyMaxMor genthalerandVernonChapman.

Ther ichtasteofourf avouri

tecoff
eeisr ef
lect
edinitsr i
chhist
ory.The
beginningsofNESCAFÉcanbet r
acedal lt
hewaybackt o1930, when
theBr azi
li
angov er
nmentf i
rstappr
oachedNest lé.Coffeespecial
ist,
Max
Mor genthaler,andhisteam setouttofindawayofpr oducingaqual i
ty
cupofcof f
eet hatcouldbemadesi mpl ybyaddingwat er,y
etwoul d
retainthecof fee’
snaturalfl
avour
.Aftersevenlongyear sofresearchin
theirSwissl aborat
ori
es, t
heyfoundtheanswer .

Qual
it
yguar
ant
eed–si
nce1938!

Thenewpr oductwasnamedNESCAFÉ–acombi nationoft heNes-root

ofNest l
éandt hewor dcaf é.NESCAFÉwasf i
rstintroducedi n
Swi tzer l
and, onApr il1st ,1938.Fort hefir
sthalfofthenextdecade,
howev er
,Wor l
dWarI IhindereditssuccessinEur ope.NESCAFÉwas
soonex portedt oFr ance, GreatBr i
tainandtheUSA.  Amer icanf or
ces
playedakeyr oleinr e-launchingNESCAFÉi nEuropebyv ir
tueoft hefact
thati twasi ncl udedi nt heirfoodrations.I
tspopul ar
itygrewr apidl
y
throught her estoft hedecade.Byt he1950s, coffeehadbecomet he
bev erageofchoi cef ort eenagers,whower eflockingtocof fee-housesto
heart henewr ock’ n’ rollmusic.In1965NESCAFÉcont i
nuedt obringyou

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 NESCAFE

thewor l
d’sbestcupofcof feebyintr
oducingfreeze-
dri
edsol ublecoff
ee
withthelaunchofGoldBl end.In1994t he‘f
ullaroma’processwas
i
nv ent
edt omaket heuniquequalityandcharacterofNESCAFÉev en
better
.Today,ourNESCAFÉcof f
eesar eavai
labletosui
talltastesandin
awi derangeofpackaging.NESCAFÉnowpr oducesmanydi f
ferent
types…

NESCAFÉcof
fees
 

NESCAFÉCl
assi
c  

Theworl
d'
sfavour
it
ecoff
ee!Youwi
l
lfi
ndi
tinj
ustaboutev
ery
count
ryal
lar
oundthegl
obe.
 
 
 
 

NESCAFÉGol
dRange
 
Thepremium choi
cef
rom NESCAFÉf
ory
ourspeci
alcupof
cof
feeeveryday.
Ther
ear
ethr
eedi
ff
erentv
ari
ati
ons:
-Gol
d
-Gol
dMi
l
d
-Gol
dDecaf
/Decaf
f 
 

NESCAFÉEspr
esso
 
Shor
t,dar
kandi
ntense.NESCAFÉEspr
essoi
smadef
rom a

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 NESCAFE

bl
endofArabicabeans,
ful
l
yr oastedforadarkandi
ntense
fl
avour
,tobr
ingyoutheauthenti
cI t
ali
anespr
essoexperi
ence
wit
haf i
necrema.
 
 
 
 

NESCAFÉPr
emi
um Range
 
NESCAFÉAl taRi caisaspeci alblendofexcl usiveLati
n
AmericanAr abicas chosenf ortheirf
ullflavour ,anddark
roast
edt odev elopt hebold,ful
l-
bodiedt aste.
NESCAFÉCapCol ombi eismadeexcl usi vel
yf rom Colombi an
Arabi
cabeans, chosenf ortheiraromatict onesandl i
ght
roast
edt oretaint heirar
omawhi l
edev elopingt hesmoot h
fl
avour.
NESCAFÉKenj ar a-Keny anandCost aRi canAr abicacoffee
beans,chosenf ort heirf
ulldepthofrefreshi ngf l
avours,are  
  
gentl
yroastedt odev el
opacof feeali
vewi thf i
nesse.

 
 
NESCAFÉDecaf
/Decaf
f
NESCAFÉDECAFDecaffgi
vesyoual
lthegreatt
asteandrich
ar
omay ou'
dexpectf
rom NESCAFÉbutwit
houtthecaff
eine.
 
 
 
 
 
 

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 NESCAFE

NESCAFÉSpeci
ali
ti
esr
ange(
Cappucci
no,
Lat
teMacchi
atos)
Del
ici
ouslyfrot
hyandcreamyt ast
ing!Whynottreaty
our sel
ftot
he
smooth,creamy andr
ichcoff
eef l
avourofNESCAFÉCappucci noorthe
mil
kyfrothofNESCAFÉLat t
eMacchi at
o.Justaddwat erandenjoy
!
Enjoyal
soourdif f
erentf
lavour
ssuchasVani
ll
a,Hazel
nutorCar
amel
Cappuccino.
Hav eal
ookaty ourNESCAFÉl ocal
webpageandcheckwhichfl
avour
s
areavai
lablei
ny ourcountr
ies.
 
  
 
 
 
 
 
 
     

NESCAFÉFr
appé 
Refr
eshi
ngonhotsummerday s,orwheneveryouf ancyacolddri
nk
wit
haninterest
ingt
wist
.Si
mplysti
rincoldmi l
k,addsomei ceand
enj
oythetasteofNESCAFÉFr
appéf orauniquecof f
eeexperi
ence.
 
 

   
  
   

 
NESCAFÉ3i
n1
Enj
oyt
heperf
ectmixofcoff
ee,
mil
korcr
eamerandsugar
i
naneasyway!Justaddwat
er.
 
 
 
 

NESCAFÉDol
ceGust
o
NESCAFÉDol ceGustoavailablei
n15count r
ies.
NESCAFÉandKRUPShav ejoinedfor
cesandl aunched
NESCAFÉDol ceGusto,auni que,
multi-
bev
eragesy stem
combiningastyl
i
shhighpr essuremachinewi t
hsmar t
coff
eecapsulesdeli
veri
nghi ghquali
tybever
agesf r
om
EspressotoCappuccinoandLat t
eMacchiato.
 
 

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 NESCAFE

MARKETI
NGSTRATEGI
ES
 NescafeFMCGgi antswantst obeapr efer
red“ cl
i
ent”.
 Str
ikeabal ancebet weentappingintolocalknowledgeofmar ket
s
anddissemi nati
ngglobalpracti
ses.
 Communi cati
oneffort
saredi r
ectedeffecti
velyandwi t
hmaximum
ret
urnoni nvestment.
 Towor kwi t
ht hel
imitednumberofagenci essot hattheyreal
l
y
knowt hebusiness.
 Encouragei tsagenciesand empl oyeesbymaki ng changesin
remuner ati
on.

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 NESCAFE

 Nescafe,ev
eni
nthepast
,resor
tedt
olow-
keymar
ketpenet
rat
ion
st
rategi
es.

MARKETSEGMENTATI
ON:
 Nescafe has pushed i
nto more di
ver
se medi
a.Globalcoffee
marketissegregat
edint
ot wosegments:i
nst
antcof
feeroastand
gr
oundcof feechi
cory
.

GEOGRAPHI
CSEGMENTATI
ON:
 NESCAFEi
sconsumedbypeopl
est
ayi
ngi
nur
ban,
semiur
banand
r
ural
areas.

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 NESCAFE

DEMOGRAPHI
CSEGMENTATI
ON:
 Age-NESCAFEi
sconsumedbyev
ery
one.

I
ncome-NESCAFEi
sconsumedbyal
li
ncomegr
oups.

PACKAGI
NGANDLABELI
NG
Packagi
ng:
Thet
imespentbyacust
omerf
orpi
cki
ngupapr
oductf
rom ar
etai
l
out
leti
saf
ew
seconds;
ther
efor
eapackageshoul
dappealt
oacust
omerwi
thi
nsucha
smal
l
i
nter
valoft
ime.I
nthi
s,bot
hpackagi
ng&l
abel
i
ngpl
ayani
mpor
tantr
ole

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 NESCAFE

i
n
at
tract
ingcust
omer
sbot
hvi
sual
l
y&psy
chol
ogi
cal
l
y.

ForNESCAFE:NESCAFEwasi
nit
ial
l
yrecogni
zedbyi
tsCOFFEEMUG
WI
THBROWNCOLOUR.Manycompet
it
orshav
etr
iedt
osel
l
t
hei
rlowerqual
i
typr
oduct
sbycopy
ingt
hepackagi
ng.Duet
oincr
easi
ng
compet
it
ion,NESCAFEi
sav
ail
abl
einsmal
lsachet
scomesi
ndi
ff
erent
si
zes.

Label
i
ng:
Consumer
s ar
e becomi
ng i
ncr
easi
ngl
y heal
th consci
ous.So i
tis
essent
ialt
o di
spl
ayt
hecont
ent
sofev
erypr
oduct
.Ev
erypacketof
NESCAFEhasi
nfor
mat
ionaboutt
hei
ngr
edi
ent
sused,nut
ri
ti
onf
act
s,
mai
l
ing & emai
l
ing addr
esses aski
ng f
orf
eedback,phone number
,
packagi
ngdat
eet
c.Al
lthi
sal
ongwi
tht
hebr
andnameanddi
rect
ionsar
e
pr
int
edi
nHi
ndi
too.

Consumerpsy
cheandNESCAFE

•NESCAFEisconsumedbypeopl eofallages,f
rom t
herichtothepoor
,
l
ivi
ng
Inci
ti
es&invil
lages.
•Whil
esomehav eitforbr
eakf
ast,f
orothersi
tisacompletewholesome
Meal.
•Forsomeit'
sthebestSUBSTITUEforchai
•Whil
eforsomei t
'sawayofgetti
ngchargedwhenevert
heyarelowon
ener
gy.

SWOTANALYSI
S
STRENGTHS

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 NESCAFE

 Greatleapforwardinmedia,cr
m,pop.
 Domi nati
onininstantcof
feemarketby55.3%share.
 Sustainedimprovementincustomerser
vicelevel
s.

WEAKNESS

 Agenciesspentallt
heirt
imefighti
ngwitheachother
.
 Adoptedapr i
cingstr
ategyhi
gherthancompetit
ors.
 Nescafesunri
sehasnodi sti
nctident
it
y. 

OPPORTUNI
TY

India’
sgrowingmar ketnon-
tr
adi
ti
onalcof
feedi
str
ibut
ionchannel
s
byRs.1900crore.
 Nontradingr
etail
i
ngcoffee

THREAT

 Amalgamat
edbeancof
feet
radi
ngcompanycomi
ngupwi
thR&G
cof
feechai
ns.

Productl
if
ecy
cleofNESCAFE:I
T HAS REACHED AT I
TS
GROWTHSTAGE.

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 NESCAFE

BRANDI
NGANDMARKETI
NG
Nescaféisabr andwi t
hinNestl
é.Nescafécanbetracedbackt othe
1930s.IntheUS,t heNescaf
énamewasusedoni t
spr oductsupuntil
the1960s,Lat
er,Nestl
é(ownersoft
heNescafébr
and)introducedanew
brandint heUnitedStatescaled Tast
l er'
sChoi
ce,whi chsupplant
ed
Nescaféformanyy ear
s.

IntheUni t
edKi ngdom,at elevi
sionadv ert
isementcampai gnstarr
ing
AnthonyHeadandShar onMaughanr anin12i nstal
mentsbetween1987
and 1993.The f i
rst11 episodes werer eleased as a promoti
onal
compilat
ionvideocalledLoveOv erGoldi n1993.Anov eli
sationofthe
samenamewr it
tenbySusanMoody( underthepseudonym Susannah
James)wasr eleasedinthesamey ear.

In2003,t
hecompanyr
eintr
oducedtheNescaf
ébrandintheUS, andt
he
pr snow knownas Nescaf
oducti éTaster'
sChoice.Itissoldi nUS
supermar
ket
ssuchasSafewayinbothgl
assandplast
icpackagi
ng.

Whilethe Nescafé br
and was cr
eated forsol
uble cof
fee,i
thas
subsequentl
ybeenusedasanumbr el
l
abr andonanumberofi nstant
coff
eepr oduct
s,i
ncl
udi
ng,i
ntheUK,GoldBl endandBlend37freeze-
dri
edcoffees.

In 2006,Nescaf él aunched the new cof fee machi ne syst

em " Dol
ce
Gusto"("sweettaste"inI t
ali
an).Thesy st
em al l
owsconsumer stomake
vari
ousst yl
esofcof feesthemsel ves(Cappucci no,Lat t
e Macchiato,
Espresso,Lungo,etc.).Addit
ional
ly,
hotchocol ateandcol ddri
nkscanbe
preparedwiththemachi ne.Themachi nesar enowsol di
nmor et han15
countri
eswor l
dwi de.Unl i
keotherNescaf épr oducts,mostDol ceGusto
beveragesuser oastedandgr oundcof f
ee,insteadofi nst
antcoffee.

Othermar keti
ng acti
vityincluded Exper
ienti
alMar ket
ing/Rel
ati
onshi
p
Marketi
ng,whichledNescaf étobecomet heheadli
nesponsorofGood
Foodshow2008atBi rmi ngham NECaspar tofthei
rcampai gntodriv
e
awarenessoft heincreasedNescaf écollecti
on.95% ofconsumer sat
thi
spopularev entrat
edt heNescaf éCollect
ionstandt hebestatthe
show. Nescaf é used adv anced 3D t echnol
ogy t o engage their
consumers,ledbyidEx perient
ial
.

I
ntheUKi
nAugust2009,Nescaf
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