This document provides background information on Nescafe and the coffee industry in India. It discusses how coffee rust impacted production in the 19th century leading farmers to switch to more resistant varieties. It notes that over 90% of coffee farms in India are small holdings under 10 acres. The document also gives an overview of Nescafe as a brand in India, its product portfolio, marketing strategies involving the 4Ps, and factors that influence consumer behavior. Competitors and Nescafe's market share are mentioned. A SWOT and segmentation analysis is also provided.

1. NESCAFÉ

2. Coffee Industry Background
• In the mid-19th century, coffee rust reached India and began infecting the Arabica trees.
By 1869, the rust had become an epidemic. As a reaction to this, many of the farmers replaced
the arabica trees with Robusta, or a rust-tolerant hybrid variety of arabica tree. These more
resistant trees are still commonly grown in India
• There are over 1, 71,000 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. However, such farms account for just over half of all land used for coffee
production and a minority of all coffee produced.
• Most coffee in India is grown in three states: Karnataka, Kerala, and Tamil nadu.

3. ▪ Coffee sees retail value grow by 10% in current terms in 2019 to reach INR52 billion, while
volumes rose by 6% to 70,663 tonnes.
▪ Coffee benefits from introduction of the GST.
▪ Volumes grow faster in foodservice than retail during the year, supported by rising disposable
incomes and busy consumer lifestyles.
▪ Coffee is expected to see retail value increase with a 10% CAGR in current terms (5% at
constant 2019 prices) over 2019-2024, with a volume CAGR of 6%.
Market Trend of Coffee
*Data Source: Euromonitor

4. NESCAFÉ- INDIA
• Brand Name- Nescafe
• Parent Company – Nestlé
• Product Type – Coffee
• Launch of Nestle in India- 1956
• Launch of Nescafe in India – 1963
• Head office – Gurugram, Haryana
• Tagline – It all starts with a NESCAFÉ

5. Nescafe Products
• NESACFE ORGINALS -8TYPES
• NESCAFE GOLD -13 TYPES
• NESCAFE AZERA-9TYPES
• NESCAFE COFFEE BAGS -2 TYPES
• NESCAFE DAIRY ALTERNATIVES -3 TYPES
• NESCAFE ORIGINS-5 TYPES
• NESCAFE NITRO -3 TYPES
• NESCAFE DECAFF-6 TYPES
• NESCAFE IN 1 PACK-3 TYPES
• NESCAFE FROTHY COFFEE -17 TYPES
• NESCAFE SPECIAL EDITION -2 TYPES
• NESPRESSO

6. Four P’s of Marketing
Product
• Nescafe have a huge set of products, which is mainly aimed to satisfy the
customer taste buds.
• Nescafe introduced various blends of coffee, which is their marketing mix
products strategy
• The demographic need of customers are also kept into consideration

7. Price
• Nestle has adopted the strategy of non-price competition .
• The price of products are dependent on the quality of the material supplied by the company.
• The volume offered to the customers were varied as was the price.
1. The sachets are available at a reasonable price.
2. The various flavours of Nescafe coffee are made available at various quantity and their
prices also set according to the packing.

8. Place
• NESCAFE products can be found almost everywhere from small stores to supermarkets.
• Nestle company follows the FMCG strategy of distribution.
• This is quite effective because it involves breaking the bulk in a typical
distribution channel . The two channels are :-
1. Manufacturing- C&F agent-Distributors
2. Retailer Manufacturing- Bulk buyers-Consumers

9. Promotion
• Nescafe emphasises on the promotion of products in all different kinds of way.
• Nescafe make the products advertise through radio, television, papers, PR activity, newspaper,
internet, etc.
• The advertisement of Nescafe also are innovative and make sure that they catch the attention of
the customers and they kind of get attracted to the products.

10. Factor Influencing Consumer Behaviour
• Cultural factors
• Personal factors
• Psychological factors
• Social factors

11. Cultural factors
Cultural
“coffee or tea?”. Most of Indians prefer tea over coffee.
In India coffee culture is increasing at 5% per year . Nescafe is trying to attract the youth culture dominantly.
Subculture
People in North India prefer “instant coffee” while in southern India they prefer roasted bean coffee.
Social class
It is homogenous ,hierarchically ordered and those who share same values , interest and behaviour.
High end customer prefer Nespresso while lower or middle end customer prefer instant or classic coffee .

12. Personal Factor
Lifestyle
People believe that coffee consumption is an indicator of rich and prosperous standard of living.
Personality and self concept
Nescafe users feel confident ,advertisement of Nescafe are trying to project users of it as optimistic and
achievement oriented and same is perceived by people.
Occupation and economic circumstances
From households to working as well as students are being targeted by Nescafe and are influenced by it.
Age group
• Nescafe primary customers are youth of India.
• Secondary customers are middle aged and old people.
• Potential customer are teenager and children.

13. Psychological factor
Consumer sometimes buy products not because of functional benefits but also psychological benefits
attached to it.
Motivation
•People seek a good taste , keeps you fresh and switched on. Nescafe tries to satisfy all.
•Needs are biogenic(arise from physiological state) and psychogenic (arises from psychological state).
Learning
• It is change in behaviour arising from personal experience.
• People experience the success of Nescafe once they try it , they began to use more and more.

14. Perception
• Consumer perceive many things through their senses i.e. power of sensory marketing and it
affect their perception and behaviour.
{when you hear Nescafe ,you sense the feeling of comfort ,relaxing and improved efficiency.}
Beliefs and attitudes
•Most of Nescafe consumers believe that this brand is best amongst its competitors.
•Nescafe is also convincing each customer that they feel better with Nescafe coffee through
various promotional events.

15. Social factor
Family
Family of orientation(parents and siblings)
Family of procreation(person’s spouse and children)
During the period of 50s and 60s Nescafe promoted family oriented values ,in their advertisement family
gathered over a cup of coffee after meal.
Reference group
If someone who get appreciated drinks Nescafe and consumers see them ,it will affect their choice of drinking.
Role and status
• It consists of activities a person is expected to perform.
• High role group prefer nutritious, brand name, quality of coffee which appeals to their senses while lower
role group think about taste and quality only.

16. Holistic marketing
Value exploration
Value exploration means how organizations can identify new value opportunities .
In the value exploration part Nescafe brought out the instant coffee mix into the market to the
customers who wish to have coffee instantly.
As you can see from the responses
Nescafe has explored the market
very well.

17. Value creation
Nescafe brought its value creation by introducing new products into the market
based on all the factors that can influence the customer
needs.

18. Value delivery
Around 200 people were part of our survey and we analysed that Nescafe was able to deliver all
the values which are conveyed in terms of taste , social gathering and productivity.

19. Major Competitors
• Bru
• Tata Coffee
• Davidoff
• BlueTokai
• Lavazza
• Starbucks

20. Nescafe Vs Competition
Product Type Company's Product Competition's Product
Instant Coffee Nescafe Classic, Gold, Sunrise,
Bru- Green Label, Instant,
Superstrong gold, Exotica
Illy
Tata Coffee-Grand
Lavazza Caffe- Espresso
Premixes
Nescafe Cappuccino, Vanilla Latte,
Choco Mocha
Wagh Bakri- coffee premixes
Girnar Instant Premix
Bru Premix Coffee-3 in 1
Pods Nespresso Fresh & Honest
Beans Nescafe whole beans
Lavazza Puro Gusto
Cafe Coffee Day Coffee Beans
Starbucks
Fresh & Honest
Ready to Drink
Nescafe- Intense, Chilled Latte,
Hazelnut
Starbucks- Frappuccino, Iced Cofee
Amul
Mother Dairy

21. Share of Mind

22. Market Share
35
34.7
3.7
1.1
0.6
22.6
NESCAFE
BRU
NARASU'S
COFFEE DAY
COTHAS COFFEE
OTHERS
0 5 10 15 20 25 30 35 40
% Share

23. SWOT Analysis
Strength:
• Brand Name
• Innovation
• Wide variety & flavours of products
• Promotion
• Quality Product
Weakness:
• Many people avoid caffeine because
of health reason
• Inclination towards tea
Opportunity:
• Reasonable product for rural areas and
developing cities
• Changing lifestyle of working people
helps to increase the sales
Threats:
• Café outlets & Local Coffee shops
• Major competition from brand like
bru and tata coffee

24. Geographic: Metropolitan Cities & the Emerging markets of other cities
Demographic:
1.Occupation – Students
2. Age – (15-24)yrs
Psychographic:
1.Busy lifestyle 2.Ambitious, outgoing personality
Behavioural:
Convenient & keeps them alert Preferred specially during exam times
Light user, First time user Medium Loyalty
Segmentation

25. Geographic: Metropolitan Cities & the Emerging markets of other cities.
Demographic:
1.Occupation – Professionals
2. Age – >24yrs.
Psychographic:
1.Busy lifestyle 2.Inspired, outgoing personality
3.In the morning & office 4.In the café
Behavioural:
Quality & efficiency at work Medium to Frequent user
Sharing special moments Medium to High Loyalty

26. Targeting
• NESCAFÉ primary target markets are coffee drinkers, specifically those who are looking for a quick
solution to quality coffee
• People that want to enjoy their coffee without any hassle/ready in a jiffy, all in the comfort of
their own home. NESCAFÉ offers coffee that can be enjoyed everywhere at your convenience
• Past Nescafe was targeted to morning people. Presently Nescafe is targeting the Youth. According
to Andrew Ward (Worldwide account Director) of Nescafe has launched a $30 million global
campaign, specifically aimed at 16-24 years old.

27. Positioning
Nescafe uses Product differentiation and Image differentiation in order to gain competitive
advantages to build a position by providing superior value compare to competitors.
For example:
Nescafe Gold cappuccino
Rich & frothy Taste
Aimed at Ambitious people who want to be
remembered
Crafted with Care for Moments that matter
Nescafe Cold coffee
Refreshing & Relaxing
Aimed at working class & also for ones who
wants to make their coffee in least time as
possible. For the young generation who
hardly spends time at kitchen when at home.
Nescafe Sunrise
Aimed at southern India
Nescafe Latte
Aimed at millennials & busy professionals who often
studies & works till late night & then have early
morning commitments
The cup that gets you going

28. TVC & Print Advertisement

29. Consumer Survey

30. Customer Feedback
I prefer Nescafe over other coffee brands mostly because I’m so used to it. Also i don’t want to ruin
my coffee time trying out others because I really enjoy having Nescafe. – Amit Pant
I prefer Bru over Nescafe because of the following reasons .Being a Product of HUL it has a strong
distribution channel making it readily available in Market than Nescafe. Bru offers a wide variety of
flavors at lower price than Nescafe .Being Health conscious I vote Bru over Nescafe because
Nescafe contains caffeine whereas Bru doesn't . Moreover being a supporter of Make in India
campaign I support Bru which is owned by India based HUL rather than Nescafe which is Swiss
based. - Rakesh Krishnan
In my family Nescafe is like a synonym for coffee because we have been using it since as long as I
can remember and hence I prefer Nescafe. – Aarathi Biju

31. Conclusion
Nescafe contains high dosage caffeine in comparison to Bru. For that reason the segment of the
consumers who don’t like caffeine or are first time users of coffee are left untapped by Nescafe
whereas Bru has targeted them with Bru Lite.
 Bru Instant coffee is India’s first chicory mixed coffee which is largely preferred in southern India
& Nescafe hasn’t been able to make an impact in that market although they launched Nescafe
Sunrise. Chicory has its own Nutritional benefits.
Since Nescafe products are 100% pure coffee, they are priced slightly more compared to Bru &
other competitors. So affordability becomes an issue for frequent/daily coffee consumers.
 Nescafe misses out on giving the experience which other competitors provide from their coffee
retail outlets like Starbucks, Café Coffee Day.
Limitations:-

32. HUL has a very strong distribution channel compared to Nestle.
Truck size standardization, Non-Containerized movement is a point of Concern for the logistics
team. They are exploring the option of Double deep system of stacking.
The taste of Nescafe in comparison to others is not very dark, so it looses out on potential
coffee lovers.

33. Suggestions
• They should launch their international products in India like Nespresso and Nescafe Whole Beans so
that they can target larger segment of consumers.
• They should try to promote more in southern part of India to be at par with the competition.
• They should try to increase their number of Nescafe Cafes so as to provide consumer an experience
rather than just a product.
• They should try to introduce low cost small size sachets of 1 INR in rural areas so as to capture the
major part of India.
• They should try repositioning strategies in India like the REDvolution movement which it did in the
international markets in 2014

34. Thanks!
Don’t forget to have your NESCAFÉ today!

35. BCG Matrix
• The Boston Matrix is a model which helps businesses analyse their portfolio of businesses
and brands. The Boston Matrix is a popular tool used in marketing and business strategy.
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