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Prepared For.

Suman Saha
Independent University Bangladesh

Market Analysis of ..


We are:- Group
Group No. 06

SL no.
1 2 3 4 5

Roll no.
1120016 1120144 1120643 1120703 1120126

Zumrat Hossain Shah Paran Mohammad Ziaul Hoque Bhuiyan Lotfunnaher Mily Saima Khanom Chaina Faria Hossain

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Current Marketing Situation:

Nescafe is the biggest and most popular coffee brand in Bangladesh. With its three distinct flavors (namely Nescafe Classic, Nescafe Sunrise and Nescafe: 3 in 1) which accounts for five different products (namely Nescafe Classic and Nescafe Sunrise which comes in glass jars and Nescafe Classic: Instant Mix, Nescafe Sunrise: Instant Mix and Nescafe: 3 in 1 which comes in small sachets), Nescafe is the market leader when it comes to coffee in Bangladesh. Nescafe offers 10 distinct flavors to the world but at the moment, due to such little demand, only three of those ten flavors, namely Nescafe Classic (also known as Nescafe Original), Nescafe Sunrise and Nescafe: 3 in 1 is available in Bangladesh.

Market Description:
Nescafe was launched in Bangladesh in 1998 for the very first time. Nescafes Market consists of students, young adults and professionals living in urban areas. Not only are young adults being exposed to coffee in cafs, students (including young adults who fall in this category) and professionals are also exposed to Nescafe through strategic placement programs. This is done by making Nescafe available in school, university and workplace cafeterias.

All of Nescafes marketing programs are based on urban areas.

Market Description:


Nestle is segmenting and targeting the Bangladeshi consumer market based on six categories as follows:
Demographic Segmentation Consumption pattern Socio-Economic factors Brand loyalty patterns Perceptual factors Cultural factors

Product Review:
Brazilian Coffee meets Swiss science, that is how Nescafe was born. An evaluation of Nescafe (in general) is given below: Made from Brazilian coffee beans Rich aroma Rich in texture Smooth in taste Practically free of calories (2 kcals per cup other than Nescafe: 3 in 1 which is as high as 5 kcals) Made from all natural ingredients (other than Nescafe: 3 in 1) Globally recognized brand.

Competitive Review:
Nescafe has very little competition as it is the market leader and is practically running a monopoly in Bangladesh with more than 80 percent of the market share and increasing. Competitors like Bru, Valentino and a few others account for roughly 15 percent of the market share cumulatively

Distribution Review:
Nescafe is to be distributed to most of urban Bangladesh concentrating mostly on the densely populated cities such as Dhaka, Chittagong and many more through a wide network of wholesalers and retailers. The major retailers in the channel are as follows: General stores Supermarkets Shopping Malls and Superstores

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SWOT Analysis:
Highly experienced and competent management team Globally recognized brand image Immense resources

Not very flexible in terms of products

No other relatively similar sized competitor in the market.

Consumers perceive imported products to be better than local ones.

Growing coffee and caf culture which promises exciting prospects in the future.

Unstable political environment.
Market open to new competitors entering.

Objectives and Issues:

Nestle plans on introducing different flavors of coffee to the Bangladeshi consumers in the future given that the market grows considerably. Nestle intends on making coffee an effective substitute in the minds of the Bangladeshi consumers as opposed to them being primarily tea consumers. First, if Nestle is to be the pioneer of the coffee revolution of Bangladesh, it has to invest heavily in creating the need and desire for coffee in the population.

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Marketing Strategy:
Nestle has tried to differentiate Nescafe from all its competitors using both product positioning and product differentiation techniques.

Product Positioning Strategy:

Nescafe is strategically positioned in the mind of the consumer to be a premium brand of coffee whose taste and aroma is unmatched. It is portrayed to create a flow of emotions in the consumer and result in an expression of feelings.

Product Differentiation Strategy:

Nescafe is made from Brazilian coffee beans which are of premium quality. It has a unique aroma which revitalizes the senses along with a rich, creamy texture which is a joy-ride for the taste buds. Simply, it is premium coffee.

Product Promotion Strategy:

Nescafe is promoted through TV commercials, sample tastings, billboards, road-side advertisement signs, posters, sponsoring TV shows and radio programs. The youth of the nation is mainly attracted through TV commercials, shows and radio programs. The target audience for this show is the youth whom Nescafe wants to attract. The older generation is targeted using sample tastings, billboards, etc.

Product Pricing Strategy:

Many would argue that coffee is relatively high priced than tea and to some extent, that claim is true. But compared to other coffee brands, Nescafe is quite reasonably priced. It is priced using the traditional cost-plus pricing strategy. That is, the cost of the product is determined and then the desired profit is added to the cost as a percentage of cost totaling the selling price of the product.

Product Distribution Strategy:

Nestle has an extremely efficient supply chain. It provides products to even the remotest parts of Bangladesh. For example, very recently Nestle started supplying its products to areas in Bangladesh which do not have any roads for entering or leaving the area. Nestle has done so by shipping their products in small vessels over water bodies. Having said that, Nescafe is only sold in the urban areas and thus, it does not test the delivery network of Nestle like some other products of the company.

Marketing Research
Market surveys and focus groups are a major source for information necessary to evaluate marketing programs and figure out future marketing strategies and plans. Stating from brand awareness to consumer satisfaction, Nestle carries out a wide range of marketing research activities. All future marketing activities are determined on the basis of the results of these research findings.

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Action Programs:
On-going and up-coming marketing programs include:
Get Set Rock! A TV show sponsored by Nescafe Nescafe My First Cup campaign Nescafe Valentines Day Special A small newspaper supplement sponsored by Nescafe which comes with The Independent on the 14th of February, each year. It has love letters written by the individuals from all over the country to their loved ones. And many more.

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Actually, they dont need to target 16 crore people of our country. If they target only 1 or 2 crore consumers and if they could sell maximum 50 to 60 lakhs product in a month, they can make a huge profit with the sales.
They are offering a 200gm toothpaste with a value of 56.00 taka (whole sale price). Variable cost for making a single product is 34.75 taka (including packaging, Commissions, etc.) and their fixed cost is 1.65 crore taka (including salaries, advertising, insurance, other expenses, etc.) for a single month.

Selling price Variable cost Fixed cost = = = 56.00 BDT. 34.75 BDT per unit. 1, 65, 00,000 BDT.

Based on these assumptions the break even calculation is:

So, if they can sell more than 7, 76,471 products in every month they will meet the profit line.

For a basic assumption if they sell 50 lakhs product, then their profit will be:

Their monthly profit will be above 23.65 crore taka.

All of the marketing activities are not going to help reach the eventual goal if proper control procedures are not in place. Nestle has strict control policies. One element which is strictly controlled is the quality of products. This is ensured by Total Quality Management (TQM). TQM is an integrated philosophy of management for continuously improving the quality of products or processes. TQM requires the involvement of management, workforce, suppliers, distributors and customers to exceed the expectations of consumers.

Also, actual figures are compared to budgeted figures in fixed intervals to ensure that any discrepancy is found and taken care of. This ensures that objectives will be meet.

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