Table of Content

Introduction to Nescafe 2

The (can products)of Nescafe 4

Entering The Market 5-6

Gain Market Share 7-8

Maturity of Nescafe 9-10

Nescafe going decline 11-13

Nescafe “Grow again” 14-15

Global trends 16-18

Competitors 19

Consumer Behavior 20-23

Conclusion 24

References 25

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Table of Content

Good day ladies and gentlemen, we are marketing research team from LimKokWing Technology University, we giving you the report of can instant coffee, company Nescafe.

In this report, you will get the knowledge of :-

- The company (can products)- When, how, why did Nescafe (can of instant products) enter the market?- How did Nescafe gain market share (grow?)- When was Nescafe (can of instant products) maturity?- When and what caused Nescafe decline and what was done to ‘grow it’ again?- The global trends, competitors, and consumer behaviour of Nescafe

Introductio n

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Nescafé is a brand of instant coffee made by Nestlé. It comes in many different forms. The name is a portmanteau of the words "Nestlé" and "café". Nestlé first introduced their flagship powdered coffee brand in Switzerland on April 1, 1938. Nestlé began developing an instant coffee brand in 1930, at the initiative of the Brazilian government, to help to preserve the substantial surplus of the annual Brazilian coffee harvest. Max Morgenthaler

led the development project. Nestlé introduced the new product under the brand name "Nescafé" on April 1, 1938. In 1965, Nestlé introduced a freeze-dried coffee brand called "Nescafé Gold" in Europe.Max Morgenthaler, and his team set out immediately 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 our Swiss laboratories, they found the answer.

The new product was named NESCAFÉ — a combination of NESTLÉ and café. We first introduced NESCAFÉ in Switzerland on April 1, 1938. For the first half of the next decade, however, World War II hindered its expansion in Europe. NESCAFÉ was soon exported to France, Great Britain and the United States. Without realizing it, American soldiers played a key role in re-launching NESCAFÉ on the continent by virtue of the fact that it was included in their daily food rations. Its popularity grew rapidly through the rest of the decade. By the 1950's, coffee had become the beverage of choice for teenagers, who were flocking to coffee houses to hear the new rock 'n' roll music.

The Products of can of instant coffee, by company Nescaf e

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NESCAFÉ CANS Original

NESCAFÉ CANS Ice

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NESCAFÉ CANS Latte

NESCAFÉ CANS Creamy Roast

NESCAFÉ CANS Mocha

NESCAFÉ MENU Ipoh White Coffee

NESCAFÉ CANS Black Roast

(Can of instant coffee, Nescafe)Entering The Marke t

“The coffee with life in it. Made in just 5 seconds”. That’s how Nescafe announced its entry into India, in 1963. Before the ad campaign hit bill-boards across the country, Indian coffee lovers were stuck with the idea that coffee is something that takes minute attention to prepare and cannot be instant.

Nestle changed that thinking forever — as it did elsewhere in the world much earlier in 1938 — which is evident from the fact that more than 4,600 cups of Nescafe, the world’s first commercial instant coffee, are being consumed every second.

Year 2013 is an important milestone for Nescafe in India as it completes 50 years in a country which took time to warm up to the idea of instant coffee.

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The coffee retail market in India is growing at 20-30 percent year on year and is expected to treble by 2016-17, according to Sunil Choudhury, senior consultant, Technova India, a consulting firm. “More than 50 percent of the Indian coffee market is instant coffee that is dominated by Nescafe, a product which is sold as 100 percent coffee,” he adds.

The growth of instant coffee has also been fuelled by modern retail that ensures availability and options to the consumers. “With FDI being allowed in retail, this would further expand in the next four to five years. Even smaller cities would have the options available with more retailers opening shops there,” Choudhury says.

Coffee consumption in India grew by three percent, a growth rate more than the global average, to 1.76 million bags (106,000 tonnes) in 2011 as compared to 2010, according to the International Coffee Organisation (ICO). The country consumed 1.71 million bags of 60 kg each.

The consumption of the brew in India, the world's sixth biggest exporter, has grown at a compound annual growth rate of 5.7 per cent during 2001-2011, according to ICO data. According to a recent study by consulting firm Technopak, there are about 1800 operating

coffee outlets across the top 60 cities in India, which could easily absorb about 2,000-2,200 more shops.

By 2015, Nestle hopes to double the amount of Nescafe coffee bought directly from farmers and their associations, purchasing 180,000 tonnes of coffee from around 170,000 famers

How Nescafe gain Market share(gro w )

Sales of CHF 92.2 billion, +2.7% 4.6% organic growth, 3.1% real internal growth Trading operating profit margin up 20 basis points to 15.2%, up 40 basis points in

constant currencies Underlying earnings per share up 11.0% in constant currencies Strong operating cash flow at CHF 15.0 billion Proposed dividend increased to CHF 2.15 per share

Mr.Paul Bulcke,

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Nestlé CEO say: “The macro-environment in 2013 was one of soft growth, minimal in the developed world and below recent levels in the emerging markets. Our response was to increase brand support, accelerate innovation, and to ensure our pricing was sensitive to consumer needs. This gave impetus to our real internal growth and, together with efficiencies and structural cost savings, contributed to our margin improvement and strong cash flow. We also intensified our portfolio management which resulted in some charges in 2013 but ensures we are putting our people and resources behind the best opportunities.“Our long-term strategic direction is to be the leader in nutrition, health and wellness. We reinforced this strategy with the creation of Nestlé Health Science, and we are extending it now to the field of specialised medical skin treatments by setting up Nestlé Skin Health S.A.“Last year was challenging and 2014 will likely be the same. We will continue to be disciplined in driving our performance in line with the Nestlé Model of profitable growth and resource efficiency. I therefore expect our 2014 performance to be similar to last year and again weighted to the second half, outperforming the market, with growth around 5% andimprovements in margins, underlying earnings per share in constant currencies and capital efficiency.”

When was its maturit y ?

In the United States, Nestlé used the Nescafé name on its products until the late 1960s. Later,

Nestlé introduced a new brand in the US and Canada called Taster's Choice, which

supplanted Nescafé for many years. The company continues to sell Taster's Choice as a

separate product, branded as superior to Nescafé and higher priced.

In the United Kingdom, a television advertisement campaign, the Gold Blend

couple starring Anthony Head and Sharon Maughan ran in 12 installments between 1987 and

1993. The first 11 episodes were released as a promotional compilation video called Love

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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 Canada and the US, and the product

is now known as Nescafé Taster's Choice. It is sold in North American supermarkets 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 60

countries. Unlike other Nescafé products, most Dolce Gusto beverages use roasted and

ground coffee beans, 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. About 95% of

consumers at this popular event rated 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 £43 m ad campaign for Nescafé, focusing on

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

Nescafé was ranked 153rd among India's most trusted brands according to the Brand Trust Report 2012, a study conducted by Trust Research Advisory. In the Brand Trust Report 2013, Nescafé was ranked 230th among India's most trusted brands and subsequently, according to the Brand Trust Report 2014, Nescafé was ranked 209th among India's most trusted brands.

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Nescafe Declin e

Nescafe, it seems, is a brand that needs a shot of caffeine in the arm. Its sales have been declining over recent years. Indeed, Nescafe's sales continued to fall in 2001, more than any other grocery brand.

But Nescafe isn't the only ailing instant coffee brand. The entire market is suffering a decline. According to Mintel, the UK instant coffee market's sales fell 7.8% during the period between 1999 and 2001.

Recent Nescafe advertising has attempted to turn around sales and share.

Ditching its previous strategy of using celebs such as Ian Wright and Denise van Outen, the latest campaign from McCann-Erickson has consisted of a quirky TV ad of a Ford Capri with an afro, as well as a series of posters. Its £9.5m sponsorship of Channel 4's Hollyoaks, emphasises how seriously Nescafe is taking targeting the youth market.

But, the fact is, 'real' coffee is in and instant isn't. The trend is reflected by the popularity of the ubiquitous coffee bar and the 'real' coffee culture this has created. However, even this once-booming market is starting to suffer. Coffee bars too are experiencing a downturn and, with 1200 in the UK, the market may be reaching saturation point.

The Biggest Brands survey reveals the brand fell from the number three slot in 2001 to number four in 2002. UK sales were down 8.2% on last year.

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Nescafe is trying to find ways of expanding, including trials of its self-heating coffee in a can, Hot When You Want, and the launch of Nescafe Ice in 2001, which targeted 16- to 24-year-olds. But whether these innovations can revive Nescafe's fortunes is to be seen.

We asked Chris Sedgwick, marketing director of Costa - the only coffee bar chain to be in profit - and Marco Rimini, director of strategy and development of J Walter Thompson, which creates Kenco's advertising, what they would do with the brand.

Chris Sedgwick

The growth of coffee-shop culture has impacted on Nescafe and influenced the market per se. It has changed consumer expectations as to what constitutes a quality cup of coffee. An espresso-based latte or cappuccino from a coffee shop is preferred by the majority of consumers. However, instant still has the convenience of being quick to make at home.

I really enjoyed the latest ad campaign. It seems to be targeting the 16- to 30-year-old sector with a more lifestyle-oriented theme. I assume it is trying to encourage younger consumers to drink coffee rather than soft drinks, which predominate in this group. Nescafe is now up against a generation of consumers who have grown up with the likes of Coke and Tango.

I think the big challenge for Nestle is the degree to which it should focus on product quality versus lifestyle and 'trendiness'. It grew the brand initially around the quality message (best beans), but with the advent of brands such as Costa, it is an increasingly difficult platform for it to mount. Further evidence here being that while instant coffee sales are in decline, sales of roast and ground coffee are on the increase.

Marco Rimini

Nescafe is one of the great 'British' FMCG brands alongside Oxo, Kellogg and Heinz but it is suffering because the way of life and coffee drinking that it symbolises is on the decrease. It is the symbol for the pre-Starbucks, pre-Mediterranean holidays, pre-Jamie Oliver Britain of

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the 60s and 70s. However hard it tries and tells us otherwise, it will be very difficult to shift this underlying perception. But shift that perception it will have to if it is going to grow its share of the market.

Actually, Nescafe is doing a pretty good job. Its market share has fallen by the amount the market has fallen. Own-label's share is falling at twice the market rate. As the dominant player in the market, it is in Nescafe's interest to grow the market or at least halt its decline.

Ultimately, Nescafe will need to decide whether you can ever turn this particular cultural tide. Perhaps it is time to cash cow Nescafe as its 'old instant' brand and launch a new brand aimed at younger market segments with more innovative products

Revive of Nescafe(what was done it “grow it” agai n )

Although Nescafe sales of instant coffee have seen a decline in the last five years. Nescafe still remains the top choice of the world, according to the research of marketing Nescafe, it seem the condition of Nescafe have been improve start form this year. The way that Nescafe done to make the company revive again, firstly the company continue to innovate and experiment with its range of products, as it did with instant coffee in a can. Can products can make consumer to save their time by just getting a coffee in 5 second.

Next, the company also produce a small piece of equipment, which retails at between RM150 and RM180, that with the push of a button produces a cappuccino or latte.

Adding more, the company continue remain with the shift away from marketing on the basis of quality and continue with its more contemporary image. This should not be just a orally hustle, not just simply a strategy, but real for consumers to make a commitment, and a contact with a pleasure, a deserved pay.

Adding more, Nescafe realise and stop trying to use one brand to appeal to everyone. Using more than one brand strategy can occupy different market segments, Excitation Internal vitality of the company, strengthening competitiveness of enterprises, Enhance company ability to resist risks. With the increasingly diversified consumer demand, using more than one brand strategy will get the big benefit in the marketing.

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Next, the company also reduce Nescafe products to cash-cow (is a business jargon for a business venture that generates a steady return of profits that far exceed the outlay of cash required to acquire or start it) status.

Adding more, Nescafe also successfully invest in innovation in packaging, product and distribution. For packaging, the first feeling is reflected in the consumer packaging, one is the fine degree, one is for a detailed description of the product itself, To see if there is no respect for the consumer's right to know. Second, prices that is for sure, product positioning depends on the positioning of your package. The same product, different packaging, represents a different price positioning. Third, is the promotion. Which promotional tools for your package. Different packaging, promotional activities after it, the resulting effect completely different.

Innovation in products, accurately find customers who have not yet been met key stakeholders, then create differentiated product value for this key stakeholders, so that the products our customers can get expect of a unique value individuality.

Company also reduce advertising support for Nescafe to maintenance level.

Global Trend s

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World’s favourite coffee brand,   Nescafé , launches Revolution

LAUNCHED FOR THE FIRST TIME

Nescafé, the world’s first instant coffee and the fifth most valuable food and drink brand, launched a unified, global look and feel across all products in the 180 countries where the coffee is being sold. It is the first time in the brand’s 75-year history that each and every Nescafé product will share the same visual identity and use the same new slogan: “It all starts with a Nescafé”.

“Nescafé is our largest single brand, aCHF10bn brand, and one of the cornerstones of our company. It is a symbol of Nestlé all around the world,” said Patrice Bula, Nestlé’s Global Head of Marketing.

“But we live in a more globalised, social world and we realised that we needed a more unified, powerful umbrella for a brand like Nescafé - a single personality that could also be expressed differently in each country,” he explained.

The unified approach to packaging design, communication and digital strategy for Nescafé, drunk at a rate of 5,500 cups each second, will feature several key design elements developed with new, younger consumers in mind.

These include the Nescafé red accent, taken from the modernised Nescafé brand mark, the iconic red Nescafé mug and a stylised graphic device, the “hub” – an aerial view of a mug of coffee.

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Younger tastes

The way coffee is consumed is changing with coffee shop trends attracting a new, younger group of consumers. The Revolution is Nescafé’s response to this shift in behaviour.

To reflect coffee’s status as a uniquely social product, the Revolution also includes digital and social innovations and services, such as the first social alarm clock providing a personalised wake-up call.

Already, Nescafé, the world’s biggest selling coffee brand by a factor of five according to Euromonitor, has grown its online Facebook presence to more than 25 million fans in little over a year.

Renewal and renovation

The revolution is just the latest stage in the brand’s continuous renewal and renovation and is being rolled out globally throughout 2014, covering over 90% of sales by the end of the year.

We live in a more globalised, social world and we realised that we needed a more unified, powerful umbrella for a brand like Nescafé - a single personality that could also be expressed differently in each country Patrice Bula, Nestlé’s Global Head of Marketing

There will also be new products and improved recipes. This month, Nescafé is launching Shakissmo in seven European markets. The chilled, milk-rich ready-to-drink coffees come in a specially designed cup that, when shaken, creates a creamy froth.

One of the brand’s biggest successes and breakthrough innovations, the introduction of Nescafé Dolce Gustoin 2006, helps consumers recreate the coffee-shop experience at home. This fastest-growing global coffee machine is now close to being a billion dollar brand in its own right, with a presence in 73 countries and sales of five million machines in 2013 alone.

Other successful coffee systems include Japan’s Barista system and Nescafé Milano Loungemachines, designed for hotels, restaurants and offices. In Thailand, Nescafé is launching a new coffee system called the Nescafé Red Cup, with a price point which represents the lowest possible cost for such a machine.

"Nescafé is a pioneering brand,” Mr Bula said. “We need to demonstrate that this brand is as relevant today as it was 75 years ago, with a portfolio that satisfies the changing world of coffee and evolving consumer tastes."

Competitors of Nescaf e

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Cashing in on coffee culture

Nescafe promoting its Dolce Gusto coffee maker for home users.

 

MALAYSIA has traditionally been a tea-drinking nation but coffee culture has caught on in

the local beverage market. Coffee outlets have noticeably mushroomed in cities and towns

over the last few years and a hot cup of coffee is gaining strong traction, particularly among

the young and professionals. But even as more players enter the local coffee market, long-

standing traditional brands such as Nescafe, say competition is yet to be a cause for concern.

In fact, Nestlé Products Sdn Bhd business executive manager (beverages) Sherif Hani

welcomes more players as this would make the beverage more accessible and help grow the

local coffee market in the long run. “Coffee does not have the highest penetration rate in the

local beverages market but it is a strong second or third segment. Household penetration is

about 65% and it is growing.

“In comparison, beverages like carbonated soft drinks and Milo, for example, have a much

higher household penetration than coffee. So, you will have other segments that are about

80% penetration. Coffee is on the high side of penetration, but it is not number one,” he

explained. Nescafe, a brand under Nestle, has been in Malaysia since 1948 and its presence in

Malaysia has been growing steadily over the decades. Last year, it was reported that

Malaysians consume some six million cups of Nescafe a day.

Consequently, Sherif notes that Nestle has a lion’s share of the local beverage market thanks

to its wide beverage portfolio. Under its Nescafe brand, the group also has a variety of

products including its Classic range and Premium products that help establish the brand as a

key player in the coffee market.

Consumer Behavio r

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TYPE OF BUYING DECISION BEHAVIOR OF NESCAFÉ   CLASSIC

Consumers act according to variety-seeking buying behaviour or habitual buying behaviour for Nescafé Classic due to following reasons.

Degree of buyer involvement

Low consumer involvement is asserted for our product since Nescafe Classic is a product which is not an expensive and do not require too much attention and involvement to buy, marketing strategy of Nescafe is to try to keep its shelves fully stocked and do a lot of reminder advertisements. In this respect, buying behaviour of Nescafe Classic can be variety-seeking or habitual buying behaviour.

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Degree of   differences   among brands

Few differences between brands

Since coffee consumers do not make heavy decisions about what brand to buy, non-stop ads serve the purpose of creating brand familiarity rather than brand conviction. Accordingly, if this process is followed by a purchase, this behaviour is likely to turn into a habit over time due to the reason that coffee taste is suitable to have an addiction towards it. As a result, consumers act according to habitual buying behaviour if they keep buying Nescafe Classic owing to an habit quality, a familiarization or a routine.

Significant perceived brand differences

Consumers could buy Nescafe without much evaluation but they are evaluating qualities of coffee while consuming. According to product’s strength or taste, next time, consumers may switch his/her brand prefer and can purchase one of the competitors of Nescafe Classic. For instance, they do brand switching between Nescafe Classic and Coffee Crown. Doing brand switching occurs because they seek variety and want to try a different coffee. Therefore, consumers act according to variety-seeking buying behaviour.

(left) Nestle Products Sdn Bhd communication director Khoo Kar Khoon and Sherif explaining their new campaign to woo coffee drinkers. 

“Nestle products hold 60% share of the local beverage market. We are number one in the business and it is not easy for our competitors to catch up,” he said.

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Growing out of home

Nescafe is perhaps better known in the household segment. Previously, coffee was mainly consumed at home and it is not uncommon to have a container of Nescafe’s soluble coffee in a home, ready for a family’s morning drink. But the rapid growth in the number of coffee outlets has increased the out-of-home consumption, opening another segment of growth for the coffee market.

“Coffee is growing very quickly as a Malaysian culture. A lot of it is happening out of home, in the coffee shops and this has influenced on how we drink coffee at home.” Drinking coffee, especially among the younger generation, said Sherif, is now a lifestyle. “It is definitely getting a lot of traction. And this is helping a cultural transformation to a more coffee world.”

The potential of the out-of-home segment is obvious as established chains such as Starbucks and Coffee Bean and Tea Leaf as well as a multitude of other artisan coffee houses are opening up every other day. And yet, players noted, it is still not a saturated market.

Sherif believes the growth of the out-of-home segment is complementary to the growth of the household market, where Nescafe has a dominant position. “The out-of-home and household markets are not competing segments because of the nature of the moment and place it is served. At home, where coffee is served, comes from the packed product. Outside the house, coffee is available at the cafés or coffee shops.”

Nonetheless, Nescafe is not about to lose out in the growing out-of-home segment. While Nescafe may not have a physical outlet of its own, Sherif noted that Nescafe provides coffee machines and solutions for entrepreneurs and coffee shop owners, which gives it a foothold in the out-of-home market. The varieties provided by Nescafe are similar to those available at regular coffee shops, he said.

Additionally, Nescafe has its Dolce Gusto range that brings the coffee experience into homes,

which gives the brand further leverage on the coffee culture. “The out-of-home is a very

important way of shaping coffee habit. And it is an important market. We are embracing it

with these solutions,” Sherif said. Nescafe is also working on a project to set up its own pop-

up kiosks. Its first kiosk has been operating for about a month now and Sherif believes the

project would progress well to further grow its presence in the out-of-home segment.

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Refreshing a brand

Although Nescafe has built a strong presence here over the years, Sherif said there was a need to continue strengthening the brand. “Every brand stands for something and we want consumers to associate the brand with an experience. So, we are positioning Nescafe as an ‘it all starts with a Nescafe’ inspiration moment,” Sherif said. To promote the campaign, Nescafe also launched its Nescafe Classic Fresh Pick, which is made from the freshest coffee cherries of the season, recently. “Coffee cherries only ripen once a year. Therefore, the fresh pick season only happens annually. “We are committed to making sure our consumers will always be able to enjoy great coffee at an affordable price at all times,” Sherif said.

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Conclusio n

Today NESCAFÉ is the world’s leading coffee brand with more than 4,000 cups of

NESCAFÉ enjoyed every second throughout the world. Nescafe has a rich history since

1938. Nescafe products are produced by Nestle. Nescafe has a great opportunity for their

in the world market. In this assignment we have learning about the knowledge on Nescafe

of Australia, USA and India. In each country, target customers are different. They make

themself in a different way so that they can attract their target customer’s attention.

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Reference s

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romantic fiction title Love Over Gold (1993, writing as Susannah James) inspired by a

television advertising campaign

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5.  Nescafé launches £43m ad push

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