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MKT321E
Marketing Research
Final Project – Phase (1)
Nescafe Classic (Nestle)

Prepared by
Habiba Ayman Hamad – 19100576
Youssef Khaled Sarhan – 19103572
Yassin Momen Mohamed – 19100294
Malak Mohamed Abouleila - 19100276
Mariam Abdallah El Sheshtawy - 19100314

Supervised by
Dr. Hazem Rasheed
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Table of Contents
❖ Phase one: - 3
1. Background Information: 3
1.2 PESTEL Analysis: - 4
1.2.1 Political: 4
1.2.2 Economic: 5
1.2.3 Sociocultural: 5
1.2.4 Technological: 5
1.2.5 Legal: 6
1.2.6 Environment: 6
1.3 SWOT Analysis: - 7
1.3.1 Strengths: 7
1.3.2 Weaknesses: 8
1.3.3 Opportunities: 9
1.3.4 Threats: 9
1.4 Marketing Mix: - 10
1.4.1 Product (Convenience): 10
1.4.2 Place (Intensive Distribution Strategy): 10
1.4.3 Price (Cost Leadership, Product Line, Geographical and Promotional strategies): 10
1.4.4 Promotion (Pull Strategy): 11
1.5 Product Lifecycle: - 11
1.6 BCG Matrix: - 13
1.7 Environmental Context: - 15
1.7.1 Past information and forecasts: 15
1.7.2 Resources and Constraints: 18
1.7.3 Objectives: 18
1.7.4 Buyer Behaviour: 19
1.7.5 Legal Environment: 19
1.7.6 Economic Environment: 20
1.7.7 Marketing and Technological Skills: 20
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❖ Phase one: -
1. Background Information:
Nescafe is a subsidiary brand of Nestle the world’s largest food and beverage company. The
instant coffee company was initially introduced in Switzerland in 1939 – as a result of the
challenge they accepted in order to support preserving the surplus coffee beans in Brazil that
resulted from the Wall Street Crash. Nestle has 291,000 employees which makes it a large-sized
company. Additionally, it is a public limited multinational. To illustrate, it is formed and owned
by shareholders and its shares can be listed and traded freely at the stock exchange market.
Nescafe is considered a product-company, whereas product-companies means all products or
services produced, marketed, licensed, sold, distributed, or performed by or on behalf of the
company or any subsidiary to reach as many customers as possible. Nescafe comes on the top
of the list in the instant coffee market with ¼ penetration worldwide, sold 190 countries with
over than 5,000 products within the Nescafe family catering to different segments. Nescafe’s
portfolio inside Egypt includes the following products: Nescafe classic, classic decaf, gold, and
gold decaf. Furthermore, Nescafe coffee mixes as the 3 in 1 and 2 in 1. All these comes in
different packaging as the plastic sachet and the glass jar, and has variety of flavors as the latte,
mocha, and others. Coffee is one of the most popular beverages in the world today. 3 billion
cups of coffee are consumed each day. Consequently, Nescafé's reported total retail sales value
between 10 and 15 billion USD in 2017. While the instant coffee market in Egypt was equal to
144.50 million USD (in retail prices) in 2015. Additionally, it is expected that by 2025 the coffee
market in Egypt is to reach 2.69 billion USD (in retail prices), therefore increasing at a CAGR of
28.08% annually for the period 2020-2025. Bringing to the fore, that there is a decrease
compared to the growth of about 40.83% per year, reported from 2015 to 2019. Adding to this,
the average household income at Egypt was reported at 69,059.600 EGP per annum in 2020. As
of 2022 estimates, the population of Egypt was estimated to be 105,838,455 people. This
population age structure is now at 32.7% under 15 of age, 4.62.8% for 15-64 of age, and a
staggering 4.5 % of the population is above the age of 65. More so, current male population is
50.2%, while current female population is 49.8%. The population of Egypt is fairly young which
significantly leads to novelty-seeking young consumers driving demand for modern and
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imported products. Furthermore, urbanization and modern lifestyle have led youngsters to
increased consumption of coffee in trendy forms such as cold coffee and coffee with desserts
these factors empowering the growth of the Egyptian market. On the other hand, increased
awareness about coffee and the health issues caused by caffeine content in coffee is a factor
restraining the growth of global coffee market.

1.2 PESTEL Analysis: -

The external environment factors include political, economic, social, technological, legal &
environmental factors. These factors can have a direct and indirect effects on business
operations, and revenue stream of Nescafe.

1.2.1 Political:
Politics always has an impact on all kinds of industries. Recently, there has been a conflict
between Russia and Ukraine, which turned into a war. each country of them has their own
alleys and enemies. It affected the Egyptian economy so hard. Because Egypt is the world's
third largest wheat importer, and Russia is a key role in wheat production, prices for wheat
have risen because the supply of wheat have decreased. As a result, inflation may arise,
especially given that 80 percent of Egypt's wheat supply comes from Russian farmers. The
inflation will result in high expenses for everyone, including people and businesses firms.

Aside from the implications for consumer products, the war will have a negative influence on
Egypt's foreign cash flow. Because Egypt depends on Russian trading activities for a percentage
of its tourism and Suez Canal income, the Russian war will result in considerable foreign
currency losses due to disrupted trade.

According to Tariffs and customs, Egypt has consistently favored trade barrier reductions as
well as the concept of open and multilateral trading systems. By actively participating in the
General Agreement on Tariffs and Trade (GATT) and other comparable forums, the government
is encouraging free trade.

Nestle, the mother company of Nescafe, gets affected from the Egyptian political status and
import/ export regulations.
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1.2.2 Economic:
Recently, the Egyptian currency's value has dropped by around 23%. Inflation is one of the most
important factors affected by economic fluctuations and crises, as it affects the financial
authorities of the country, reflecting its impact on rising exchange rates and lower purchasing
power in the market. The latter affects the overall cost of living and the cost of financing a
company, as well as its ability to maintain profits and capital.

Global inflationary pressures began to rise after the global economy overcame the turmoil
caused by the COVID 19 pandemic. This pressure has been strengthened by the recent conflict
between Russia and Ukraine. Rising prices for basic international commodities due to further
supply chain disruptions, coupled with increased risk aversion and rising fares, are fueling
domestic inflationary pressures and external imbalances.

1.2.3 Sociocultural:
Egyptians consume a lot of tea. It is a tradition to drink tea in the morning after lunch and at
night. However, the demand for tea has been diminishing. The demand of Egyptians has shifted
from tea lovers to caffeine addicts. there are multiple reasons why this shift occurred. First
reason is that people became more health conscious than ever, and coffee promote health
status.

Coffee drinks contain more caffeine than tea, which increases the health benefits associated
with caffeine, such as, lower risk to diabetes, constricts blood vessels in the brain, and can
relieve headaches and migraines. Second, coffee impacts one’s energy and mood.
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1.2.4 Technological:
Egypt is about to launch a new phase of automated and electronic system for tax collection.
This move was initiated by the minister of finance Mr. Mohamed Maait.

In line with the digital transformation strategy known as "Digital Egypt," the government
launched a unified electronic and automated tax collection platform in 2021 designed to collect
and document taxes for all businesses. The system covers all tax types including income tax,
freelance tax, deduction and collection refunds, VAT and stamp duty, and all transactions are
designed to be paid electronically using cashless payment methods.

1.2.5 Legal:
At the beginning of 2022, the Egyptian president, Abdelfattah El Sisi, have increased the
minimum monthly wage from 2,400 EGP to about 2,700 EGP. This 13% increase aims to ease
the burden on Egyptians who have been victims of austerity painful measures in recent years.

Consequently, this mandatory move has affected Nescafe as it has increased their total salary
expense. Which in return has been challenging for Nescafé to maintain the prices of their coffee
jars and to maintain their profits.

1.2.6 Environment:
In line with Egypt’s sustainable development strategy whereas environment is 8th pillar of it
aiming to integrate all the economic sectors to preserve natural resources and support their
efficient use and investment, while ensuring the rights of future generations A clean, safe, and
healthy environment that supports competitiveness, creates new jobs, eliminates poverty, and
achieves social justice by diversifying production resources and economic activity. This comes in
line with Nestle’s goal to achieve net zero greenhouse gas emissions by 2050.
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1.3 SWOT Analysis: -

Strengths Weaknesses

● Diverse portfolio. ● Difficulty to differentiate each

product in their portfolio.
● Variety of classic editions
(packaging forms and ● Multiple efforts to rejuvenize the
regular/decaf) brand.

● Brand name.

● Loyal customer base.

Opportunities Threats

● Partnerships. ● Substitute products.

● Refurbished packaging design. ● Unstable economic and investment

regulations. ‘
● Nestle 2050 sustainable strategy.

1.3.1 Strengths:
Diversification of products is way in which companies introduce different products or
modify it somehow to make it available to a larger segment, this why Nescafe at the
company level have more than 5,000 products within their family making their product
available for everyone who needs. To illustrate, Nescafe’s primary target market consists of
basically coffee drinkers, especially people who are in the need of instant and qualified
coffee that stimulates body within a day. However, they developed products like the
Nescafe 3 in 1 coffee to attract the middle-aged and young consumer, while Nescafe gold
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was developed to attract people aged from 30 – 60 years with modern lifestyle who are
looking for great taste of coffee.

Another feature of Nescafe classic that it comes in different packaging, along with prices.
Starting from the 1.8gm priced at EGP1, 18gm at EGP8, 50gm at EGP30, 100gm at EGP55,
and 200gm at EGP75-115. For the sachets it enables ease of use and is used once. This
makes it easy for potential customers as they do not have to spend time wondering what
quantity is optimal for consumption. The pricing of the product is differentiated through
packaging. Customers who cannot afford to buy large products buy sachets and enjoy the
same product in the same quality at a lower price, also enable Nescafe to distribute at rural
areas. This increases the customer base for the product through also increased repurchase
and decreased stockpiling of the product. Additionally, they offer two variants of Nescafe
classic, classic regular coffee, and classic decaf. The decaf version is developed to target
people who prefer their beverage with less caffeine which highlights Nescafe’s ability to
target different audiences with different needs and wants.

By reviewing the top 100 megabrands named by Euromonitor, a global statistical surveying
company, showcasing the world's leading FMCG brands based on their retail business. In
2017, they estimated Nescafé's retail sales to be between $10 billion and $15 billion USD.
Nescafé, the world's first soluble coffee with a unique heritage that nowadays consumers
consume over 6,000 cups of Nescafé coffee every second, and the brand has efficiently
conquered the coffee market in over 190 countries around the world.

1.3.2 Weaknesses:
The marketing of Nescafe products left a lot to be desired. Even though Nescafe successful
in terms of sale, but its positioning and unique selling proposition for each product is not
clearly defined which can lead to the attacks in this segment from the competitors.
Promotions do not clearly showcase the different products of Nescafe and only target
Nescafe as a sole brand.
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Nescafe has mainly focused on the emotional aspect of their instant coffee in their
marketing efforts. While older, more traditional advertisements emphasized the qualities
and attributes of their coffee, this approach wore off as Nescafe gained a solid consumer
base. The core message of quality has thus been lost on current consumers, leading to
lower consumer perceptions of quality. Therefore, as of 2014 they decided to change their
logo and launch a new brand identity campaign aiming to create a more unified, global look
that is consistent across all of their products throughout the world. To appeal to a new
generation of coffee drinkers, Nescafe developed a fresh visual identity. With the rise of
coffee shops and a perceiving instant coffee isn't that great, Nescafe is attempting to
rebrand itself to appeal to a younger demographic. Recently, they are more focused on
highlighting their environmentally friendly practices on their social media through using
green colour and taglines that are directed towards the environment rather than the
product or the brand itself.

1.3.3 Opportunities:
Firstly, Nescafe has great opportunity in making partnerships with other brands that could
venture that market. Additionally, people love to see combination between powerful
brands in several industries, this could result in penetrating a new market segment through
introducing a co-branding between the classic edition of Nescafe and another reputable
brand.

Secondly, refurbishing the packaging of Nescafe classic is another golden opportunity for
the giant instant coffee maker. Renewed packaging can attract consumers’ attention and
pique their interest. From this point, change of packaging in terms of design through colours
like highlighting the green and earthy tones that would reflect Nestle efforts in enhancing
people’s lives and reducing their negative impact on the environment could benefit them by
attracting buyers who care about the environment. Another approach to renew the
packaging of Nescafe, is to make the product more convenience by a hand click that’s pours
1 teaspoon into your mug.
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Thirdly, the whole world is now aware of the environmental catastrophe. As a result,
everyone is now concerned to contribute to the environment in order help with the climate
change. Nescafé reduces and eliminates carbon emissions throughout where coffee is
procured and throughout its operation. Nescafé also uses eco-friendly packages. These are,
among other things, concrete steps that will help Nestlé meet its 2025 packaging
commitment and 2050 Net Zero ambitions.

1.3.4 Threats:
The continuously changed investment, and economic regulations in Egypt especially on
imported goods and raw material – as well as the value-added taxes that might be added on
anytime without prior notification is significant concern for powerful brands.

1.4 Marketing Mix: -

1.4.1 Product (Convenience):
Nescafe Classic coffee is the most popular coffee powder in the world. Nescafe classic is a
coffee that can be consumed on a daily basis. It comes in a powdered form and is made entirely
of genuine coffee beans. It contains no additional components. Comfort and motivation are
provided by Nescafe classic. It can be made in a few simple steps. Simply combine a spoonful of
coffee powder with hot water, along with a pinch of sugar. Your coffee is now ready. As a result,
it refreshes the mind every morning and evening. Per 100g packet, it contains 269kj of calories,
27g of fiber, and 25g of ant oxides. This why it is beneficial to one's health.

1.4.2 Place (Intensive Distribution Strategy):

Since Nescafe is a convenient product, intermediaries play a significant role in Nescafe
distribution and exposure of the product to the prospected customers. An intermediary
constitutes stores like supermarkets, hypermarkets, booth stores…etc. Nescafe uses the
intensive distribution strategy – as they have many facilities across all Egypt covering the main
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cities and rural areas. It easy to buy anywhere and anytime from booth stores, supermarkets, to
hypermarkets and even online through some retailers like Carrefour, Metro Market, Gourmet,
and others.

1.4.3 Price (Cost Leadership, Product Line, and Promotional strategies):

For Nescafe, the focus is on the maintaining prices because in circumstances where a price
change may be desirable, but the magnitude of change is undeterminable. It is found the
competitors of Nescafe are very week in terms of having market share, so it gives company an
edge on competitors to maintain prices while introducing new product. Nescafe is at currently
using a price leadership strategy and it is because it fulfills all the requirements of a successful
price leadership. On the other hand, Nescafe uses the product line pricing strategy; Nescafe has
a full line of instant coffee products and because of differences in customer perceptions of the
value of different features, they use product line pricing strategy. Each of Nescafe Classic,
Nescafe 3in1, Nescafe Gold has different price in different sizes. Lastly, they use a promotional
pricing comes in several forms as special events and flash sales.

1.4.4 Promotion (Pull Strategy):

Nescafe uses various promotion tools like television commercials that have wide coverage and
aiming to highlight the youthful spirit and associate their products with their consumer through
emotional appeals., newspaper and print media like magazines whereas print media tell all
sorts of product benefits and help consumer throughout the buying process, additionally they
direct sell their products through their coffee corner to encourage consumers’ trials. Taking all
these in consideration, we conclude that Nescafe is using pull strategy where they are heavily
spending on advertisements to create a consumer demand for the product.
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1.5 Product Lifecycle: -

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Nescafe is in the maturity stage of the product life cycle, the reason that Nescafé has a market
share of 70% in the coffee market worldwide. The maturity level is usually achieved when the
product has already reached a widespread recognition in the market, and since Nescafé is
Egyptian’s best selection of coffee and 100% pure, it is fair to assume that customer trust and
brand loyalty already exist. For a brand maturity is that stage when the people are fully aware
of the existence of the brand. With this comes in its competitor brands. For Nescafe there
hasn’t been much competition in the Egyptian market. Nescafé claimed to offer high quality
coffee. Nescafe as a brand has already created awareness therefore what they did was trying to
connect with their audience. There was no need to promote the product anymore as people
were already aware of it and liked it. Eventually, during this stage the sales will peak then slow
down. This maturity stage normally lasts longer than the previous stages, and it poses strong
challenges to marketing management. Therefore, Nescafe should consider modifying the
market, product offering, and marketing mix. In modifying the product, changing characteristics
such as quality, features, style, packaging, or technology platforms to retain current users or
attract new ones. In modifying the market, the company tries to increase consumption by
finding new users and new market segments for its brands. Finally, they can try modifying the
marketing mix—improving sales by changing one or more marketing mix elements. The
company can offer new or improved services to buyers. It can cut prices to attract new users
and competitors’ customers. It can launch a better advertising campaign, and this what they did
through campaigns where people could relate with the brand. Nescafe indulged into below the
line promotion like celebrity endorsements and sponsorships. They have also entered into
social marketing with such campaigns- through Facebook, twitter and of course its own
website. Strategies like these were used just to keep the brand alive and sustainable in the
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minds of its customers. Furthermore, they could use aggressive sales promotions—trade deals,
cents-off, premiums, and contests. In addition to pricing and promotion, the company can also
move into new marketing channels to help serve new users.

1.6 BCG Matrix: -

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⮚ Whether it’s their 5000 types of coffee beans available in different SKU’s or the coffee
vending machine, the coffee business of Nestle under brand Nescafe is a star in the BCG
matrix.

1. Question mark: These are products with low market share and high growth rate. They
require a lot of cash to keep operating in the market. The question mark in the company
is Nescafé milky and Nescafé hazelnut they have not been able to create strong demand
in the market and the sales of this product decreased.

2. Star: These are products with high market share and high growth rate. They need lots of
investments mostly to finance their fast growth and maintain its large market share.
Nescafe star product are Nescafé latte, Nescafé gold, and Nescafé cappuccino as they
have the able to generate high revenues to the company. Also, this supported by the
high demand of its customers.

3. Cash cows: These are products with a high market share and low growth rate also, the
cash cows are the foundation of the company. Nescafe bestselling products are Nescafé
3 in 1, Nescafé 2 in 1, and Nescafé classic. They provide the most revenue with no or
little advertisements. Nescafé 3 in 1, Nescafé 2 in 1, and Nescafé classic need few
investments and produce cash that the company uses to invest in other products in the
company and pay its bills, so it’s considered as a cash cow.

4. Dogs: These are products with low market share and low growth rate. The product here
is Nescafé Arabian. Nescafé Arabian can generate enough cash to maintain itself, but it’s
not considered as a large source of cash.
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1.7 Environmental Context: -

1.7.1 Past information and forecasts:
Egypt, after Nigeria and Ethiopia, is the most populous country in the Middle East and the
second-most populous country in Africa. Egypt's population will continue to rise according to
the figure below, thanks to a high fertility rate of 3.2 births per female in 2017. In fact, children
aged 0 to 14 years old made up almost 35% of Egyptians in 2017, whereas the median age was
23.8 years. Additionally, Egypt's population is fairly young (with room for more growth, as 35%
of Egypt's population is between the ages of 1 and 14), which significantly leads to the following
trends: Demand for modern and imported products is being driven by novelty-seeking young
consumers. It should be taken into consideration that currency flotation, inflation, and
increasing prices have altered customer attitudes about specific products, rendering them out
of reach for some consumers.
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The graph above shows an analysis and forecast of the instant coffee industry by region 2019-
2026 (USD million) which is anticipated to reach US$ 33.22 Bn by 2026 from US$ 24.09 Bn. in
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2019. It is noted that the region of Middle East & Africa will continuously grow over the years,
and it is ranked at the 3rd place after North America and Europe from 2023-2026.

This global growth in the coffee market is back to the changing lifestyles and increasing
consumer patterns, eased preparation of instant coffee, and wide range of flavors.
Furthermore, because of the powdered structure of instant coffee, it has a longer shelf life,
which has contributed to an increase in the number of restaurants and cafes, which
consequently has boosted global demand for instant coffee. That’s why the leading instant
coffee brands focus on advertisements that increase the global coffee demand market.
Likewise, Consumers' fast-paced lifestyles and growing food and beverages industry has led to
an increase in the number of restaurants and cafes, which is creating demand for commodity
products such as instant coffee.

According to Nestle annual review of 2021, total sales of soluble coffee and other coffee
systems increased from 22.256 in 2020 (in millions of CHF) to 23.975 in 2021 which represents
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an increase in the organic growth rate of 8.9% and RIG of 7.8%. Further, the sales of the EMENA
region jumped from 29.1% in 2020 to 29.6% in 2021, while the number of employees decreased
by 0.4% in 2021, and the number of factories remained the same.

Furthermore, in 2015, Egypt's instant coffee industry was worth 144.50 million USD (measured
in retail pricing). The coffee market in Egypt is expected to reach 2.69 billion USD (in retail
prices) by 2025, with a CAGR increase of 28.08 percent per year from 2020 to 2025. In 2015, the
average per capita consumption in value terms was 1.57 USD (in retail prices). The indicator is
expected to slow down its growth in the medium term (by 2025) and increase at a CAGR of
25.99 percent per year. This indicates the potential of strong purchasing power of Egyptian
consumers.

1.7.2 Resources and Constraints:

Nescafe gets the coffee beans from the fruit known as cherries of the coffee plant. The cherries
are eatable but taste absolutely nothing like coffee, in fact, they possess a mild and slightly
sweet flavoring – a far cry from the rich and flavorsome coffee beans inside.

There are more than 120 types of coffee plants, and each type has its own different flavor.
Most of the coffee beans that Nescafé uses comes from either Arabica or Robusta coffee beans
or a blend of the two together.

Arabica is one of the most popular and oldest types of coffee beans. these beans are loved by
coffee lovers because it needs to be vibrant and has a complex taste, but with aromas of fruits,
flowers, chocolate, and nuts, which tend to be sweet and smooth. Generally, Arabica is more
expensive than Robusta. This is because it is much more sensitive and needs more specific
growing conditions such as weather and altitude to grow.
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Robusta coffee beans are commonly grown in Africa and Indonesia. They also contain a higher
caffeine content that creates a deeper and stronger taste than the Arabica. It is the main
ingredient espressos due to its rich flavor and it is also used widely used in instant coffee.

1.7.3 Objectives:
Nescafe has two main objectives.

1. Improvement of the livelihoods of coffee farmers and the sustainability of coffee

production.
2. A future of high-quality coffee will continue to be available and affordable for their
customers now and in the future.

1.7.4 Buyer Behavior:

As consumers continue to seek out convenience, they look for coffee as part of their daily
routine, whether they’re popping to the supermarket or filling up with petrol. In fact, the top 4
times when consumers are likely to buy a coffee on-the-go are when it’s the nearest coffee on
offer, a treat, when it’s cheaper than a coffee shop, weekday mornings on the way to work.

1) Motivation: People seek a good taste and while a good taste, they want the coffee to serve
its use which is keeping you fresh and switched on. In this purpose, they are satisfied with
Nescafe because it has both. They find the satisfaction they seek.

2) Perception: People thinks that when you hear Nescafe, you sense the feeling of comfort,
relaxing, efficiency. So, Nescafe provides these kinds of thought in customer’s minds and people
form a meaningful picture of Nescafe and this affects Nescafe in constructive ways. It’s easy to
organize and interpret information with Nescafe.
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3) Learning: People experience the success of Nescafe, and they began to use Nescafe more
and more. Once they get try it, they begin to be a Nescafe fan and we hear from everyone it’s
success. So, this also affects us. People’s learnings are positive about Nescafe.

4) Beliefs and Attitudes: Most of Nescafe consumers believe that this brand is the best of its
competitors. These beliefs affect more customers, so this makes Nescafe more and more
successful every passing day. And for their attitude, Nescafe is also convincing each customer
that they feel better with coffee. Not just with coffee, when they use Nescafe’s coffee. So, the
consumers have positive beliefs and attitudes about Nescafe.

1.7.5 Legal Environment:

Through a decision that is the first of its kind towards the private sector in Egypt, the Ministry of
Planning and Economic Development settled a minimum wage of EGP2,400 as of January 2022,
along with minimum salary increase of 3% per financial year. They have decided on firm
penalties ranged from EGP1,000 to EGP5,000 per each employee that will be applied on
companies who will not implement the new minimum wage, besides the periodic bonus. This
move comes in context with the new labor law that is currently being reviewed by the Egyptian
Parliament. This sudden increase in salaries would affect Nescafe expenses.

1.7.6 Economic Environment:

The inflation rate recently faced in Egypt has various impacts on Nescafe. First, they will have to
spend more on wages and change their benefit plans to avoid their employees resigning their
jobs to look for better wages. Additionally, supplies of many raw materials will become harder
to secure for reasonable prices. Moreso, the oil price has risen by 58% since November 2020.
Thus, we conclude that all these factors will subsequently impact Nescafe's expenses and will
act as an obstacle to their growth and market expansion efforts.
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1.7.7 Marketing and Technological Skills:

Nescafé's target market comprises primarily coffee users, particularly those in need of instant
and qualified coffee that stimulates the body within a day. It is a quick option for individuals
who want to enjoy it at home, work, or school because of its convenience; therefore, it
addresses each of them in different ways. It tries to energize target segments of working
individuals or students in the mornings, sober them up in the midday, and wake them up in the
evening hours. To illustrate further, Nescafe Egypt made a campaign entitled “Coffee for
Egyptian Students” that was addressing the ultimate confusion between the two generations.
There are many things that we don’t necessarily agree on with our parents and relatives, and if
you choose a specific branch that is not the traditional, you will be under scrutiny and
uncomfortable conversations with your family in the gathering which increase in Ramadan
specially. The copy gained 2.1M views and 78K engagement on Facebook. Nescafe’s wants
consumers to experience the aesthetic perception of the nice packaging and hedonically enjoy
various tastes and preparing options it offers. By carefully paying attention to the latest changes
in consumer preferences, Nescafe was successful in making its consumers feel highly involved
with its products. Due to its presence all over the world, the brand learned that acculturation is
a much better strategy than global standardization. Thus, when it comes to Nescafe there is no
global mass customization, but rather a regional-based mass customization. Nescafe has an
almost aggressive worldwide strategy when it comes to consumers experiencing the product.
The consumer is supposed to be able to consume Nescafe products everywhere, whenever
possible and the way she/he wants to consume it. Nescafe is present in most of the Egyptian
coffee shops in either. Nescafe is also present in most vending machines allowing the consumer
to choose from various tastes and choices to satisfy her/his needs.

Model

illustration:
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There are four independent variables influencing the dependent variable which is the brand
image. the factors influencing brand image are the brand logo, WOM, service quality, and social
mission.

Research objectives

o To identify the relation between brand logo and the brand image

o To identify the relation between word of mouth (WOM) and brand image

o To identify the relation between social mission and brand image

o To identify the relation between service quality and brand image

o To identify the factors influencing brand image

Research Questions

o What is the relationship between brand logo and brand image?

o What is the relationship between word of mouth (WOM) and brand image?

o What is the relationship between social mission and brand image?

o What is the relationship between service quality and brand image?

o What are the factors that influence brand image?

Research hypothesis

o H1: Brand logo has a significant positive impact on brand image

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o H2: eWOM has a significant impact on brand image.

o H3: The social mission has a positive influence on brand image

o H4: Brand logo has a significant positive impact on brand image

Management research problem Marketing research problem

Should we change our brand image? To determine how Nescafé is positioned in

consumers’ minds

Literature Review

Brand image:

Back in time described brand image as the symbolic perception of commodity products (Teng,
Lo and Lee, 2022). Lastly, it was defined as when someone hears or sees the brand names or
logo, the first thing that springs to mind is the brand image (Kaur and Kaur, 2019). Perceiving a
brand according to the related brand connections held in memory is another definition of brand
image (Lin, Lin and Wang, 2021).

e-WOM:

The availability of any positive or negative reviews made by prospective, existing, or former
customers on a product or company through the internet is called e-WOM. (Kunja, Kumar and
Rao, 2022). It is also defined as the usage of online tools to communicate through consumer-
generated content that is mainly directed towards other customers (R.V. and Varshney, 2022). e-
WOM is generally defined as the act of meeting and sharing opinions with each other on the
Internet and exchanging the ratings for services, which provide usability, accessibility, and
persistence for information that were unavailable in traditional offline WOM
Page 25 of 44

The Relationship between e-WOM and brand image:

Only one research has been made to examine the factors of e-WOM that has the most impact on
brand image. Another research analyzed a specific type of word-of-mouth communication,
which is the negative product reviews and its impacts. The study showed that unfavored product
reviews has an impact on consumers viewpoint of a brand (brand image). These studies showed
that e-WOM has become an everlasting factor of the digital marketing mix by contributing
heavily to the brand image and purchasing decisions of online customers. Furthermore,
purchasing intangible goods and services brings increased risk because intangibles such as after
sale services cannot be evaluated before the consumption experience. Thus, the influence of e-
WOM is highly dependent factor that customers rely on (Jalilvand and Samiei, 2012). 2articles
missing

Service quality:

(Edvardsson, 1998) describes service quality as both technical which means what the customers
gets and functional which means how the customer receives the service. The construct of service
quality as conceptualized in the service marketing literature centers on perceived quality, defined
as a consumer’s judgment about an entity’s overall excellence or superiority. More so, it was
defined in terms of physical quality, interactive quality and corporate (image) quality (Kang and
James, 2004). Differentiating technical and functional attributes is one technique to define
service quality. Some of the respondents saw service quality as a technical quality which is the
purpose for the firm, However, quality was also defined in terms of functional characteristics,
such as dependability, consistency in service, close client relationships, confidence, and service
speed (Grönroos, 2001).
Page 26 of 44

Relationship between Service Quality and Brand Image:

A previous research stated that customer perception about service quality directly affects brand
image. The same paper also investigated the direct effects of store image and service quality on
brand image and purchase intention for a private label brand. Additionally, they showed that
service quality has a direct and positive effect on brand image. Moreover, many studies have
investigated customers’ perceptions of service quality as a predictor of customers’ behavior
intentions, such as WOM communication. The research indicated that service quality positively
affects behavioral outcomes such as loyalty and positive WOM. A proposed a model of the
behavioral consequences of service quality suggested that perceived service quality was related
to positive behavioral intentions (Jalilvand and Samiei, 2012). In addition to this, many profit
organizations, non-profit organizations and social enterprises are working hard to enhance brand
image and value through offering a social mission, staff behavior, service quality and brand
identification (Lin, Lin and Wang, 2021). Previous research has found that service quality is a
predictor of brand image and has a favorable impact on it (Mai and Cuong, 2021). Also,
according to studies, service quality has a beneficial impact on brand image (Saleem and Raja,
2014).

Brand logo:

Brand logo is defined as the key signature of a brand with an essential communication and
uniqueness, which can reflect a brand’s image. Every company have its own brand logo as this
brand logo has a set elements, namely, name, color, typeface and design which enables
consumers to differentiate and identify a brand or a company (Kaur and Kaur, 2019).

A brand logo can refer to a range of graphic or typeface features as a brand identity or
uniqueness indicator or even the signature of the brand, as it can be ranging from word-driven to
image-driven. The word-driven is such as word marks or stylized letter marks and the image-
driven is such as picture marks (Machado, Vacas‐de‐Carvalho, Costa and Lencastre, 2012).

Brand logo is defined as the key visual representations of a brand as the consumer’s
understandings and judgments of a brand logo will affect their relationships with the brand,
Page 27 of 44

moreover the brand logo helps in building the brand equity and provide the
distinctiveness/expressiveness benefit for fulfilling consumer’s needs (Japutra, Keni and
Nguyen, 2015).

Relationship between brand logo and brand image:

Brand Logo is perceived as a primary visual representation of brand image. Brand image is the
immediate mental perception held by an individual as what comes to mind when one hears or
sees the company name or logo. There were various researchers in the article advocated that the
brand logo is used as a brand identity’s roots, which impact in the consumer judgments and
behavior and helps to create and maintain a company’s brand image.

In the article it was investigated that the relationship between brand logo and brand image in the
financial setting. The study showed that the brand logo of a company significantly impacts the
company's image. Brand image can significantly impact consumer sense of association with the
brand and is likely to influence behavior of consumers toward the brand. So, there is a significant
positive impact of Brand logo on brand image. (Kaur and Kaur, 2019)

Social mission:

Social mission refers primarily to the characteristics of an organization, as the business with
social objectives whose surplus revenue are reinvested to accomplish the goals and tasks in order
to achieve satisfactory tradeoffs between financial and social logic. Moreover, social mission is
defined as a firm that is publicly devoted to positively impacting a broad range of stakeholders
and awarding for profit firms with a social impact status. (Lin, Lin and Wang, 2021)

Social enterprise is defined as an organization whose objective is addressing the social needs by
methods of market mechanisms. As social enterprises primarily depend on innovative activities
to create incomes and scale operations (He, Liu, Phang and Luo, 2022).

Social enterprises are defined as organizations that seek to focus on social issues through the
application of business practices and principles. Social enterprises are those organizations that
carry out a combination of both economic and social goals, as well as those that include a third
Page 28 of 44

accountability to the environment. Social enterprises can be created as the organizations or

programs within which social entrepreneurs achieve their work (Mitchell, Madill and Chreim,
2015).

Relationship between social mission and brand image:

It was concluded in the article that short mission statements clearly speak about who the
customers are, what products or services are offered, as the consumers agree that purchasing
social enterprise products can achieve social objectives that yield benefits. It was investigated in
the article that the social enterprise can build a brand with strong product competitiveness under
a social mission that matches the requirements of the customers. Therefore, the social mission
has a positive influence on brand image. (Lin, Lin and Wang, 2021)

Questionaire
<to be added>

Research Design

Purpose Of The Study Descriptive

Strategy Used Survey

Extent Of Researcher Interefence Minimal “Correlational”

Study Setting Non-Contrived

Unite Of Analysis Individual

Time Horizon Cross-Sectional

The study's purpose is descriptive in the way that it simply describes and identifies a correlation
study between Brand Image and all of the other independent variables, which are: Word of
Mouth, Brand Logo, Social Mission, and Service Quality. The survey strategy was used because
Page 29 of 44

it is the most appropriate strategy for descriptive research and is a systematic way of gathering
information about people, describing, comparing, and analyzing their behavior. Furthermore, the
level of researcher intervention is correlational because the research is conducted in a natural
context with minimum interference by the researcher with the usual flow of events, resulting in a
non-contrived study setting. Moving on to the unit of analysis, it is seen as an individual since
we'll be analyzing the data received from each individual and treating each customer's reaction as
an individual data source. Finally, the time horizon is cross-sectional because data are collected
just once from our sample of customers.

Results findings

Descriptive Frequencies

Item Frequency Percentage

Gender

Male 42 42%

Female 58 58

Marital Status

Single 74 74

Married 22 22

Divorced/separated 4 4
Page 30 of 44

Age

Under 20 6 6

20 – less than 35 74 74

35 – less than 50 15 15

50 - less than 65 5 5

Education

High School 25 25

College Degree 58 58

Post Grad-Degree 17 17

City of Residence

Cairo 22 22

Alexandria 74 74

Other 4 4

Current Job Status

Manger/Executives 8 8

Clerks 1 1

Students 55 55

Professionals 15 15

Supervisor 2 2

Administrator 2 2
Page 31 of 44

Others 17 17

Income

less than 2,000 11 11

2000-less than 5000 23 23

5000-less than 10000 20 20

Over 10000 46 46

Reliability Analysis

Scale Number of items Alpha in current study

Brand Image 8 0.841

Brand Logo 7 0.882

Social Mission 5 0.882

Service Quality 4 0.714

Page 32 of 44

WOM 4 0.717

Correlation Matrix

Variables M SD Brand WOM Social Service Brand

Logo Mission Quality image
N= 100

Brand Logo Mean SD 1 0.263** 0.442** 0.304** 0.339**

3.73 0.695

WOM Mean SD 0.263** 1 0.246** 0.436** 0.213**

4.00 0.651

Social Mean SD 0.442** 0.246** 1 0.507** 0.442**

mission
3.584 0.764

Service Mean SD 0.304** 0.436** 0.507** 1 0.568**

Quality
3.58 0.763

Brand Mean SD 0.339** 0.213** 0.442** 0.568** 1

image
4.127 0.541
Page 33 of 44

Discussion

Discussion

A comparison between your results and hypothesis

Ex: el results el tala3t bt3t iv 1 w el dv is positive yb2a supported

Limitations

this study focuses on the primary factors that affect the brand image of Nescafe. it doesn’t
cover other problems that can affect brand image. the data collection conducted on 100
randomly selected respondents who are representing the population which can’t generalize
the results of the survey to the population as a whole. Our data is cross sectional. Our
research’s time horizon is cross-sectional; therefore, it is impossible to evaluate population
changes unless two or more surveys are conducted at distinct times in time. Such repetition
is frequently costly and time-consuming. Respondents may not be 100% truthful with their
answers. Respondents may struggle to understand the significance of some questions that
appear obvious to the researcher. This misunderstanding can lead to misleading outcomes.

Recommendations (After the findings, what the researches recommend the

marketing managers)

we recommend that Nescafe to use the longitudinal time horizon rather than
the cross section. Since the cross sectional major disadvantage is that The
Page 34 of 44

timing of the snapshot is not guaranteed to be representative and it doesn’t

analyze consumer behavior over a period of time. however, a longitudinal
study has the advantage of allowing researchers to discover changes or shifts
in the characteristics of a particular population at both the collective and
individual levels. The crucial point to remember is that longitudinal studies go
beyond a particular point in time. As a result, they can create event sequences
and better understanding.

Another recommendation would be that Nescafe should use probability

sampling rather than non-probability sampling in future research. Since
nonprobability sampling is a bit rough with a biased and subjective process
which is used to generate the hypothesis. On the other hand, probability
sampling is more precise, objective, and unbiased which makes it a good fit
for testing the hypothesis.

Conceptual definitions:
Page 35 of 44

Variable Definition

Brand Image When someone hears or sees a

brand name or logo, the first thing
that springs to mind is the brand
image (Gray and Balmer, 1998).

E-WOM The availability of any positive or

negative reviews made by
prospective, existing, or former
customers on a good or company is
called e-WOM (Heinng-Thurau et
al.,2004)

Social Mission social mission is defined as a firm that is publicly

devoted to positively impacting a broad range of
stakeholders and awarding for profit firms with a
social impact status. (Lin, Lin and Wang, 2021)

Brand Logo A brand logo is considered as an

important element of branding
strategy (Henderson, Cote, Leong and
Schmitt, 2003) which helps the
consumers to generate emotional
reaction towards the brand (Westcott
Alessandri, 2001).

Service Quality (Edvardsson, 1998) describes

service quality as both technical
which means what the customers
gets and functional which means
how the customer receives the
Page 36 of 44

service.

Conclusion (summarizing the whole report)

Descriptive Statistics

As previously mentioned, the questionnaire of this research was distributed on 100 respondents

using Google forms, whereas 58% Of sample population were females. It was found that 74%

are single, 22% of them are married, and 4% divorced. Furthermore, the majority ages between

20 to less than 35 that represented 74%. In addition, 58% holds bachelor’s degrees, followed by

high school and post graduate with 25% and 17% respectively. Furthermore, the residents of the

city of Alexandria had the greatest impact on which the opinion of this study with 74%

participants from Alexandria compared to 22% of Cairo residents. Regarding the respondents’

job occupation, 55% students contributed to this study, followed by 17% from different sectors,

then 15% professionals, and the least were clerks, supervisors, and administrators with 1%, 2%,

and 2% respectively. Lastly, for the household income, most of the respondents earns above EGP

10,000 representing 46%, while 23% earns an income ranging from EGP 2,000 to less than EGP

5,000. Moreover, 20% earns 5,000 to less than 10,000, and 11% earns less than 2,000.

Reliability
Page 37 of 44

Because it is very important to assess the reliability level of the current measures used in this
study, the researchers checked Cronbach’s alpha results with the study sample of 100. The test
revealed the following: -

Brand image: It is evident from the reliability analysis that the brand image scale is reliable with
Cronbach scale of 0.841 which is above 0.7.

Brand Logo: It is evident from the reliability analysis that the brand logo scale is reliable with
Cronbach scale of 0.882 which is above 0.7.

Social mission: It is evident from the reliability analysis that the social mission scale is reliable
with Cronbach scale of 0.822 which is above 0.7.

Service Quality: It is evident from the reliability analysis that the service quality scale is reliable
with Cronbach scale of 0.714 which is above 0.7.

Word of mouth: It is evident from the reliability analysis that the word of mouth scale is
reliable with Cronbach scale of 0.717 which is above 0.7.

Correlation Matrix

➔ There is a positive, weak and highly significant relationship between brand logo and
brand image.
➔ There is a positive, weak and highly significant relationship between word of mouth and
brand image.
➔ There is a positive, moderate, and highly significant relationship between social mission
and brand image.
➔ There is a positive, strong, and highly significant relationship between service quality and
brand image.

Regression
Page 38 of 44

Since the significance relationship between the independent variables brand logo, word of
mouth, social mission, and service quality and brand image equals to 0.118, 0.439, 0.131, and
0.001 respectively. Therefore, the adopted hypothesis of brand logo, word of mouth and social
mission are rejected whereas, the service quality hypothesis is supported.

Discussion

According to our findings the brand logo is supported as having positive relationship with brand
image. As we agree with the author (Kaur and Kaur, 2019) based on the hypotheses it was
mentioned that there is positive relationship between brand logo and brand image. As the author
we supported mentioned that Brand Logo is perceived as a primary visual representation of
brand image and also brand logo is what comes to mind when one hears or sees the company
name or logo and helps to create and maintain a company’s brand image.

The social mission has positive relationship with brand image according to our finding, so it is
supported, so we agree with (Lin, Lin and Wang, 2021) author based on it was mentioned in the
hypotheses that there was positive relationship with brand image as it was concluded that short
mission statements clearly express who the customers are, what products or services are offered,
as the consumers agree that purchasing social enterprise products can achieve social objectives
that give benefits. That’s why also it was investigated that the social enterprise can build a brand
with strong product competitiveness and matches the requirements of the customers.
Page 39 of 44

As our findings for the service quality hypothesis is supported as there is a positive relationship
between service quality and brand image. As we agree with (Lin, Lin and Wang, 2021)
(Jalilvand and Samiei, 2012) authors because as mentioned in the hypotheses there is positive
relationship between service quality and brand image, as the Customer perception about service
quality directly affects brand image, as mentioned also they showed that service quality has a
direct and positive effect on brand image.

The word of mouth according to our findings it has positive relationship with brand image. based
on the hypotheses we agree with the author (Jalilvand and Samiei, 2012) as it was mentioned that
it was positive relationship between word of mouth and brand image. As These studies showed
that word of mouth has become an everlasting factor of the digital marketing mix by providing
heavily to the brand image and purchasing decisions of online customers

Limitations

this study focuses on the primary factors that affect the brand image of Nescafe. it doesn’t
cover other problems that can affect brand image. the data collection conducted on 100 randomly
selected respondents who are representing the population which can’t generalize the results of
the survey to the population as a whole. Our data is cross sectional. Our research’s time horizon
is cross-sectional; therefore, it is impossible to evaluate population changes unless two or more
surveys are conducted at distinct times in time. Such repetition is frequently costly and time-
consuming. Respondents may not be 100% truthful with their answers. Respondents may
struggle to understand the significance of some questions that appear obvious to the researcher.
This misunderstanding can lead to misleading outcomes.

Recommendations

based on our findings, the researches recommend the researchers the following: we recommend
that Nescafe to use the longitudinal time horizon rather than the cross section. Since the cross
Page 40 of 44

sectional major disadvantage is that The timing of the snapshot is not guaranteed to be
representative and it doesn’t analyze consumer behavior over a period of time. however, a
longitudinal study has the advantage of allowing researchers to discover changes or shifts in the
characteristics of a particular population at both the collective and individual levels. The crucial
point to remember is that longitudinal studies go beyond a particular point in time. As a result,
they can create event sequences and better understanding.

Another recommendation would be that Nescafe should use probability sampling rather
than non-probability sampling in future research. Since nonprobability sampling is a bit rough
with a biased and subjective process which is used to generate the hypothesis. On the other hand,
probability sampling is more precise, objective, and unbiased which makes it a good fit for
testing the hypothesis.

According to the questionnaire that we collected, we have concluded that the brand image of
nescafe got slightly affected from the lack of product differentiated. around 12% of people thinks
that the logo of nescafe doesnt communicate what it stands for. thats why we recommend that
nescafe should do a rebranding and relate more to its product offerings.

Conceptual definitions:

Variable Definition

Brand Image When someone hears or sees a brand name

or logo, the first thing that springs to mind
is the brand image (Gray and Balmer,
1998).

E-WOM The availability of any positive or negative

reviews made by prospective, existing, or
former customers on a good or company is
called e-WOM (Heinng-Thurau et al.,2004)
Page 41 of 44

Social Mission Social mission refers primarily to the

characteristics of an organization, as the
business with social objectives whose
surplus revenue are reinvested to
accomplish the goals and tasks in order to
achieve satisfactory tradeoffs between
financial and social logic.

Brand Logo A brand logo is considered as an important

element of branding strategy (Henderson,
Cote, Leong and Schmitt, 2003) which helps
the consumers to generate emotional
reaction towards the brand (Westcott
Alessandri, 2001).

Service Quality (Edvardsson, 1998) describes service

quality as both technical which means what
the customers gets and functional which
means how the customer receives the
service.

Conclusion (summarizing the whole report)

Page 42 of 44

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