Consumer Behaviour and Marketing Psychology: Nescafe Coffee Report

This report provides a comprehensive analysis of Nescafe coffee, focusing on consumer behavior and marketing psychology. It begins with an executive summary and introduction, followed by a product overview that explores Nescafe's history and various forms. The report then delves into a critical analysis of Nescafe, highlighting its strengths, such as its strong brand name and advertising strategies, as well as its weaknesses, including high marketing costs and inventory issues. Strategic recommendations are then proposed, including cost leadership and product differentiation strategies, to improve Nescafe's market position and customer loyalty. The report concludes with a summary of findings and recommendations, emphasizing the importance of adapting to consumer needs and market trends to achieve long-term success. This report is available on Desklib, a platform providing AI-based study tools and resources for students.

Consumer behaviour and marketing
psychology

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................1
INTRODUCTION...........................................................................................................................2
Product overview....................................................................................................................2
Critical analysis......................................................................................................................3
Strategic Recommendations...................................................................................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................8

EXECUTIVE SUMMARY
The whole report is based on Nescafe which is the leading product in terms of beverage.
This report helps in finding out the strategies that can be used by company in order to make their
product differentiated by that of competitors by reducing their cost and also by making their
physical appearance different as compared to that of competitors. In addition to this, it has also
been find out from this report that Nestle producing Nescafe coffee is affecting with both
positive and negative impacts which is discussed in detail.
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INTRODUCTION
Consumer behaviour is termed as that study in which organisations, groups and
customers of particular organisation either select, buy or use ideas, goods and services of a
particular brand that may meet their needs and requirements (BISHOP and MEGICKS, 2019.
While marketing psychology is defined as is feelings among participants of market that
motivates them to buy particular products or services (Carlson, Rahman, Taylor and Voola,
2019). In this report, Nescafe coffee product has been taken into consideration. It was first
introduced in Brazil as a way in order to preserve local coffee surplus. This brand was later
introduced in Switzerland and than around the whole world. Now it is labelled as Nescafe
Classic. Nestle is a company related to Swiss food and beverage and was established in 1905. it
is basically headquartered in Vevey, Switzerland having number of offices all over the world.
Thus, in the below report, overview of particular product in terms of Nescafe coffee will
be discussed in deeply. Further, critical analysis will be done and provided on both product and
company producing the coffee products that is Nestle. In addition to this, this report also
highlights on strategic recommendation in terms of future improvements has been analysed that
will further lead the cited firm in achieving further improvements and gaining long term success.
Product overview
Coffee is termed as the most popular beverages among all in the whole world. While
among all the products, Nescafe is the most popular and recognizable brand that produces
varieties of instant coffee. It has also been subjected for number of controversies in terms of
unfair labour practices to reports of child and also forced labour in farms of coffee. Nescafe is a
coffee brand that has been produced by Nestle. This product basically comes from many
different forms. They started developing this brand at Brazilian Government initiative. This was
to help in order to preserve the substantial surplus of annual harvest of Brazilian coffee. The
cited company Nestle introduced this product of coffee first in Switzerland on 1st of April in year
1938. it is one of the most popular brand of coffee that is available in number of varieties that
may suit taste and occasions. Nescafe coffee product contains less caffeine and high amount of
Acrylamide then regular coffee. Further, it contains huge amount of same antioxidants. But the
product of coffee is termed as healthy, low calorie beverage that is further linked with same
benefits as other product in terms of health.
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This coffee product of Nescafe was exported further to France, UK and USA. In year
1965 this cited brand extended its innovation with help of offering that they made in terms of
Gold blend as the freeze dried soluble coffee. Nescafe is leading product for Latinos and is 100
percent pure that is made up of blend of selected beans of coffee that is roasted in careful manner
in order to capture complete aroma and flavour.
Critical analysis
It has been critically evaluated that the major strength of Nescafe is that it is produced by
strong brand name as Nestle (Charry and Parguel, 2019). This brand has high level of advertising
strategy and visibility which attracts huge number of customers towards the brand which is their
current marketing strategy. Further, Nescafe coffee product also has good distribution and
availability in terms of products. They promote their brand in creative and innovative way that
attracts large amount of customers. Nestle depends heavily on advertisements and promotions for
shaping opinions of consumers and also in driving traditional sales which leads them in high cost
of marketing and also with return on investment that has been made is questionable (Liu, Petit,
Brit and Giboreau, 2019) But sometimes promotional strategies of business are not that much
effective in order to minimise influence of consumers.
Nescafe has the largest range in terms of instant coffee products in Australia and also has
consumer franchise (do Paço, Shiel and Alves, 2019). Thus, variety of flavours instant coffee
drink comes with six different types including Enhancing vanilla, captivating caramel, mocha,
silky white chocolate mystical hazelnut and nestle butterfingers which makes the cited firm as
the most strong that attract high level of consumers (Wooten and Rank‐Christman, 2019).
Nescafe is sold in 50 countries all around the world.
Nescafe has become name of household with respect in terms of growth in market.
Therefore, for this they make sure that people all over the world are happy by using their
product. They emphasise on product promotion and ensure that all possible communication is
known to customers in terms of product. They make use of radio, television, papers and also
internet. They only made one thing sure that their logo remains unchanged so that they can
imprint it peoples mind. They make innovative advertisements and also makes sure that they
easily catch attention of customers. Moreover, this product also has variety of other reasons that
attracts customers towards them which includes lots of flavours and also availability of huge
varieties. In addition to this, it has been analysed that 43.7% that range of price is above average,
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that is the negative part of the cited brand and were also not aware about projects. Further, they
also gain high level of recognition in terms of brand. This product of coffee has been adopted
several strategies in order to make strong position of coffee in market which is termed as the
largest market in terms of drinking coffee.
Charry and Parguel, (2019) stated that Marketing communication is done through
television and radios. But now days competitors are taking support of social networking sites.
Use of TV and radio channel to make people aware with product and services is costly strategy
as compare to social networking sites. Nescafe has to invest a lot for promoting the coffee
product on television. This is the negative point for the business unit and it defiantly needs to
take support of social sites more in order to make connection with mass audience and gaining
their attention.
Further, it has also been analysed that the cited brand is valued in terms of money and
customers feel happy and good to use this product as it us of satisfying price range and also
quality. It has been claimed that it has unique taste having strong and dark flavour to it. They
also confirmed that the cited product is smooth and fluid and is also noticeable after taste. In
addition to this, its appearance also plays major role in attracting huge number of customers
towards it.
Marketing communication is most essential part of business unit. It is essential for the
business to circulate clear information. Nescafe make people aware with features of business
units in clear words so that no confusion takes place. But sometimes use of inappropriate words
create confusion in the mind of consumers and they move towards other organisations. In
addition to this, the major weakness is related to days of inventory which is very high as
compared to that of competitors in order to convince cited firm for raising huge capital to invest
in particular channel and all this has high level of impact on long term growth and success of
cited organisation Nestle that produces Nescafe coffee product. The financial planning is also
lacking and not done in proper and adequate manner and it has been analysed with the help of
current asset and liquid asset ratio (He, Chao and Zhu, 2019). Moreover, it is also not very good
in terms of demand forecasting of particular product that is leading towards higher rate of
opportunities that is missed. This has basically decreased their sales and also loyalty customer
base towards that brand.
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As they are not raising maximum capital in particular channel which have made them
suffer with low sales and lack of customer loyalty base because they are unable to reach to wide
range of customers.
Strategic Recommendations
It has been recommended that Nescafe must adopt various strategies to differentiate their
products from their competitors and also in terms of reduction of cost (Petit, Velasco and
Spence, 2019). The strategies that they can be adopted include cost leadership strategy and
product differentiation strategy. It has been analysed that company has declined their loyalty
base of customers and purchases of their products has lowered down. This can be solved if cited
organisation adopt cost leadership strategy.
Declining sales is the major issue faced by Nescafe now a days. In order to resolve this
problem entity should adopt cost leadership strategy. It is termed as establishing advantage in
terms of competition by reducing cost of product that they are offering to customers in market
(Strategic Management - Cost Leadership, 2018). It is therefore driven by efficiency, size, scale, scope
and cumulative experience of cited organisation. It becomes extremely difficult in order to
deploy this strategy because of management that must work in constant manner in order to
reduce their cost at every level in so that they can remain competitive at every stage. Thus, to
solve the issue related to royalty base of customers and also purchases of particular product, the
team of management has to work constantly towards reduction of cost of entire product range in
portfolio of particular company. In order to adopt this strategy cited firm must produce goods of
such quality that are easily acceptable by customers and also set price which is lower than any
other competitor that is producing actually same product. In addition to this, cited organisation
must try to identify requirements of customers and also trends of present market and later
produce goods and services accordingly. Thus, the customers will be satisfied and the issue
related to this will be solved.
The other strategy that can be used by them is product differentiation. This strategy plays
very essential role in order to differentiate the product of a company from that of other
competitors which will help them in attracting large number of customers towards the brand.
Thus, to adopt strategy of product differentiation the company must focus on differences in
attributes of product and also has to appeal of its distribution system. They must also ensure that
the nature of services that has been offered by them to customers are different and better than
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others. This strategy will therefore help cited company to create value of particular product with
other similar products on market. It will also help in creating huge brand loyalty among all
customers and also lead in gaining market share through perceived quality or cost savings that
may also help in creating high level of loyalty base for customers. In addition to this, company
must also focus on quality or design differences that competitors lack. This will them in gaining
huge competitive advantage in market and will also make customers to view product as the
unique one and gets attracted easily. They must also try to analyse needs and desires of
customers and provide them with that which later increase satisfaction level of guests.
In addition to this, it has also been recommended to Nestle company that they must try to
continue to deliver quality or great value to customers that will aid them in maintaining loyalty
of customers and also increase satisfaction level. This is very much important as when products
is unable to maintain quality than their customers will go to their competitors in order to acquire
desired products or services. And will decrease the sales of a product. Nescafe must also try to
focus on design and physical appearance of a product. As today's consumers are very much
attracted to creative thing. So Nescafe product must opt various innovative and unique designs to
place their products in market and must also use innovative techniques to advertise them to
customers. They must also provide with clear information related to products so that customers
can easily differentiate their views with that of competitors. In addition to this, they must also try
to make their customer service as the first priority and listen to their complaints and views
regarding product and try to resolve their issues. This will help in increasing sales of Nescafe and
will increase their loyalty base towards the brand.
CONCLUSION
From the above report, it has been analysed that Nescafe coffee is one of the leading
product in beverages which is basically produced by Nestle. In addition to this, it has also been
analysed that this product is 100% pure and people are using it in large amount. Further, it has
also been identified that there are both positive and negative effects of the product on market.
Nescafe product is facing various problems related to loyalty customer base and also related to
low purchase. Moreover, this assignment also highlights on various recommendations that can be
used by cited company to increase their sales in market and also achieve high level of brand
image and also to increase customer base.. Therefore, strategy that is discussed includes cost
leadership and product differentiation which will help them in differentiating their product from
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competitors and also in achieving long term success by achieving competitive advantage in
market.
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REFERENCES
Books and Journal
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its impact on satisfaction and customer engagement behaviours in mobile social
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Charry, K. and Parguel, B., 2019. Educating children to environmental behaviours with nudges:
the effectiveness of social labelling and moderating role of age. Environmental
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do Paço, A., Shiel, C. and Alves, H., 2019. A new model for testing green consumer
behaviour. Journal of Cleaner Production. 207. pp.998-1006.
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Consumer Behaviour. 18(1). pp.12-24.
He, H., Chao, M.M. and Zhu, W., 2019. Cause-related marketing and employee engagement:
The roles of admiration, implicit morality beliefs, and moral identity. Journal of
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Liu, J., and et.al., 2019. The impact of tablecloth on consumers’ food perception in real-life
eating situation. Food Quality and Preference. 71. pp.168-171.
Petit, O., Velasco, C. and Spence, C., 2019. Digital sensory marketing: Integrating new
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pp.42-61.
Tamulienė, V., Kazlauskienė, E. and Pilelienė, L., 2019. Ecologically-Conscious Consumer
Purchases in Lithuania.
Wooten, D. and Rank‐Christman, T., 2019. Stigmatized‐identity cues: Threats as opportunities
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Online
Strategic Management - Cost Leadership. 2018. [Online] Available through:
<https://www.tutorialspoint.com/strategic_management/strategic_management_cost_leadership.htm>
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