NESCAFE

A
PROJE
CT OF
MARKETING MANAGEMENT
ON
NESCA

FE

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 Table of contents

Sr.No Content Page

No.
1 Introduction 3-6
2 Types of NESCAFE 7-9
Coffees
3 Marketing strategies 10
4 Market Segmentation 11
5 Packaging & labeling 12
6 SWOT Analysis 13
7 Product Life cycle 14
8 BRANDING & 15
MARKETING
 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
 NE FE

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

NestIé S.A: is one of the largest food and nutrition companies in the world,
founded and headquartered in Vevey, Switzerland. Nestlé 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 Lactée Henri Nestlé

i I stitut t tu i s P4
 NESCAFE

Company, which was founded in 1866 by Henri Nestlé. 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

Nestlé has 6,000 brands, with a wide range of products across a number of
markets including coffee (Nescafé), 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.

• 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

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

INTRODUCTION OF NESCAFE

Nescafé is a brand of instant coffee made by Nestlé. It comes in the form of

many different products. The name is a portmanteau of the words "Nestlé" and
"café’ Nestlé'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 NESCAFÉ can be traced all the way back to 1930, when the
Brazilian government first approached Nestlé. 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.

QuaIity guaranteed – since 1938!

The new product was named NESCAFÉ − a combination of the Nes−root of

Nestlé and the word café. NESCAFÉ 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. NESCAFÉ was soon exported to France, Great
Britain and the USA. American forces played a key role in re−launching
NESCAFÉ 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
NESCAFÉ continued to bring you the world’s best cup of coffee by
introducing freeze− dried soluble coffee with the launch of Gold Blend. In 1994
the ‘full aroma’ process was invented to make the unique quality and character
of NESCAFÉ even better.Today, our NESCAFÉ coffees are available to suit all
tastes and in a wide range of packaging. NESCAFÉ now produces many
different types …
 NESCAFÉ coffees

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

NESCAFÉ GoId Range

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

NESCAFÉ Espresso
Short, dark and intense. NESCAFÉ 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.

NESCAFÉ Pre ium Range

NESCAFÉ AIta 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.
NESCAFÉ Cap CoIombie 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.
NESCAFÉ 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.
NESCAFÉ Decaf/Decaff
NESCAFÉ DECAFDecaff gives you all the great taste and rich
aroma you'd expect from NESCAFÉ but without the caffeine.

NESCAFÉ SpeciaIities range (Cappuccino, Latte Macchiatos)

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

NESCAFÉ Frappé
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 NESCAFÉ Frappé for a unique coffee experience.

NESCAFÉ 3in1
Enjoy the perfect mix of coffee, milk or creamer and sugar in an
easy way! Just add water.
NESCAFÉ DoIce Gusto
NESCAFÉ Dolce Gusto available in 15 countries.
NESCAFÉ and KRUPS have joined forces and launched
NESCAFÉ 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.
 MARKETING STRATEGIES
• Nescafe FMCG giants wants to be a preferred “client”.
• Strike a balance between tapping into local knowledge of markets and
disseminating global practises.
• Communication efforts are directed effectively and with maximum
return on investment.
• To work with the limited number of agencies so that they really know
the business.
• Encourage its agencies and employees by making changes in
remuneration.
• Nescafe, even in the past, resorted to low−key market penetration
strategies.
 MARKET SEGMENTATION:
• Nescafe has pushed into more diverse media. Global coffee market is
segregated into two segments: instant coffee roast and ground coffee
chicory.

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

DEMOGRAPHIC SEGMENTATION:
• Age− NESCAFE is consumed by everyone.
• Income− NESCAFE is consumed by all income groups.
 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.

LabeIing:
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.
 SWOT ANALYSIS
STRENGTHS

• Great leap forward in media,crm,pop.

• Domination in instant coffee market by 55.3%share.
• Sustained improvement in customer service levels.

WEAKNESS

• Agencies spent all their time fighting with each other.

• Adopted a pricing strategy higher than competitors.
• Nescafe sunrise has no distinct identity.

OPPORTUNITY

• India’s growing market non−traditional coffee distribution channels by

Rs.1900 crore.
• Non trading retailing coffee

THREAT

• Amalgamated bean coffee trading company coming up with R & G coffee

chains.
 NESCAFE

Product Iife cycIe of NESCAFE: IT HAS REACHED AT ITS

GROWTH STAGE.

BRANDING AND MARKETING

Nescafé is a brand within Nestlé. Nescafé can be traced back to the 1930s. In the
US, the Nescafé name was used on its products up until the 1960s, Later, Nestlé
(owners of the Nescafé brand) introduced a new brand in the United States called
Taster's Choice, which supplanted Nescafé 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 Nescafé brand in the US, and the product
is now known as Nescafé Taster's Choice. It is sold in US supermarkets such as
Safeway in both glass and plastic packaging.

While the Nescafé 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, Nescafé 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
Nescafé products, most Dolce Gusto beverages use roasted and ground coffee,
instead of instant coffee.

Other marketing activity included Experiential Marketing/Relationship

Marketing, which led Nescafé to become the headline sponsor of Good Food
show 2008 at Birmingham NEC as part of their campaign to drive awareness of
the increased Nescafé collection. 95% of consumers at this popular event rated

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 NESCAFE

the Nescafé Collection stand the best at the show. Nescafé used advanced 3D
technology to engage their consumers, led by id Experiential.

In the UK in August 2009, Nescafé unveiled a £43m ad campaign for Nescafé,

focusing on the purity of its coffee and featuring the strapline "Coffee at its
brightest".

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