Evaluating Nescafe's Marketing Strategies in India Report

This report provides a detailed analysis of Nescafe's marketing strategies within the Indian market. It begins with an introduction to marketing and marketing management, emphasizing consumer-oriented approaches and the key activities of marketing managers. The report then provides background information on Nescafe, its industry, and its position in the marketplace. It evaluates Nescafe's segmentation, targeting, and positioning (STP) strategies, examining how the brand divides the market, identifies its target consumers, and positions itself against competitors. The report further applies the marketing mix (product, price, place, and promotion) to a specific target market of young consumers aged 16-30, comparing Nescafe's approach to that of its competitor, Bru. The analysis covers aspects of branding and positioning, highlighting how Nescafe utilizes product and image differentiation and value proposition strategies. The report also considers how contemporary issues might impact Nescafe's marketing activities and concludes with recommendations based on the analysis.

Marketing Management
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Table of Contents
INTRODUCTION ...........................................................................................................................................3
Nature of marketing and marketing management in contemporary organizations....................................3
Evaluate the key marketing aspects of segmentation, targeting and positioning (STP) and analyses
Nescafe’s approach .....................................................................................................................................4
Apply the marketing mix and aspects of branding and positioning to a specific target market and be able
to evaluate competitors' programs.............................................................................................................5
How contemporary issue might effect on marketing activities in Nescafe ................................................9
RECOMMENDATIONS ...............................................................................................................................10
CONCLUSION ............................................................................................................................................11
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INTRODUCTION
Marketing can be defined as the set of activity and processes that is involved in creation,
communication, delivery and exchange of offerings that provide value to consumers and society
at large (Witell and et.al., 2015). The primary role of marketing is to attract as well as retain
consumers within the company. The present report has thus made an attempt to study the 8ps of
marketing with respect to Nescafe coffee in India; this is followed by suggesting
recommendations for the 8ps and finding out how the contemporary issues may put an impact on
Nescafe and its marketing strategy.
Nature of marketing and marketing management in contemporary
organizations
A contemporary organization can be defined as the firm where management focuses on
empowering employees and reducing centralized control so that all levels are responsible for
their own decisions work (Rashid and Ghosh, 2015).
As per the nature of marketing in contemporary organizations, it can be regarded as a
consumer oriented approach where the marketers must find out what satisfies the consumers and
they can then frame strategies accordingly. Managers engross in five key activities which are-
planning, organizing, staffing, directing, and controlling. Marketing management implies the
combination of these concepts so that target can be achieved The research scholars also consider
it as art and science as the need is to choose target market and communicate the product
offerings of any company accordingly (West, Ford and Ibrahim, 2015).
On the other hand, nature of marketing management states that it is an exchange process where
there is an interchange of idea and information between marketers and consumers. Most
important nature of marketing management is that it starts as well as ends with the consumer.
Other than this, marketing management also adheres with a goal oriented approach where the
aim is to generate profits through consumer satisfaction (Zarkada-Fraser and Fraser, 2015).
Information about Nescafe, its industry and marketplace
Nescafe is a brand of coffee that is served by Nestle Company and is available in many
forms such as original, gold, gold decafe among others. The company had introduced its first
cafe brand in 1938 (Nescafe, 2018). It belongs to coffee industry which makes revenue of around
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20 billon dollar throughout the world. In US itself, a person drinks an average of 3.5 cups of
coffee on a daily basis (Izberk-Bilgin and Nakata, 2016). Nescafe is one of the well-known
coffee brands in this industry and has got a presence in around 189 nations of the world
(Nescafe, 2018).
Evaluate the key marketing aspects of segmentation, targeting and positioning
(STP) and analyses Nescafe’s approach
Figure 1 Segmentation, targeting and positioning
(Source: Patel, 2014)
Segmentation
It is the activity of dividing consumers into sub groups on the basis of some shared
characteristics such as similar interest, need or location (Hilty and Slowinski, 2014). Nescafe has
utilized many segmentation strategies in Indian market. In the geographic segmentation the
brand has divided the nation into Northern and Southern. The South Indians prefer hard and
roasted coffee hence same kinds of flavors are offered to them. On the other hand, the North
Indians prefer instant coffee which is consumed in high amount (Brem, Maier and
Wimschneider, 2016). In demographic segmentation, the coffee brand has tried to serve the
needs of males and females in age group from 16 to 60 years who love to drink coffee in any
form. In psycho-graphic segmentation, emphasis has been on people from middle and upper
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class segment who believe that coffee consumption indicates a high standard of living
(Gassmann, Frankenberger and Csik, 2016).
Targeting
This concept is all about finding out the target markets and making plan for advertising
media to be used in order to make the segment more appealing (Matzler and et.al., 2013). In this
regard, the target market for Nescafe in Indian market is males and females in age range of 16 to
60 years who belong to upper or lower middle class. Its target market can further be narrowed
down to independent students who want to make coffee without any assistance; working females
who wish to provide instant coffee to husbands when they come back from work (Rashid and
Ghosh, 2015). This is followed by people in late night shifts who wish to have a stimulant in
form of coffee so as to keep themselves awake for fulfilling work based responsibilities.
Positioning
This concept focuses on how a consumer views the product offerings of a company in
comparison to competitors. The strategy helps in creating a good perception within eyes of
consumers and also generates good sales and revenue figures (Pantano, Bassano and Priporas,
2018). In terms of positioning strategy, Nescafe in India has utilized product and image
differentiation for gaining competitive advantage in market over rival firms. For example, the
company has biggest market share with respect to instant coffee market in India. This is on
account of wide variety of coffee offerings as well as high level of quality and satisfaction given
to consumers (Bailey and Alexander, 2017). It has further made use of Value Proposition
strategy where the company is selling products at same prices as done by rival firms. But at the
same time it is also offering high level of consumer satisfaction with respect to quality.
Apply the marketing mix and aspects of branding and positioning to a specific
target market and be able to evaluate competitors' programs.
Marketing mix can be defined as the set of those actions and tactics that are used by a
company to promote a brand or product within market (Jovanović and Radojičić, 2016). The
elements of marketing mix in context of Nescafe in India have been discussed below and have
been compared with its competitor being Bru. The selected target market is of youngsters
between 16 to 30 years of age.
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Product
It can be defined as an item that has been produced for satisfying needs of a certain
consumer group and it can be tangible or intangible in nature. Any company should have a
product mix which is in tune with the demand of market. Hence a marketer should carry out
extensive research while creating a product mix for company (Dohaei and Ketabi, 2015).
Nescafe coffee has been introduced by the company so as to satisfy the taste buds of
coffee lovers within Indian market. The company has made sure that it offers varied kinds of
coffee to the people and is thus regarded as market leader in instant coffee industry. For the
youngster target market, it has introduced many coffee blends such as Nescafe original, gold,
gold decafe among others. These are available in hot and cold options so that it can be consumed
by them as per weather and preference (Izberk-Bilgin and Nakata, 2016). Bru has also adopted a
similar kind of product mix but in different names such as bru lite, cappuchino, Roast & Ground,
instant among others. The company also believes in innovation and launched a cold coffee
version in India which gained immediate attention (Samper, Giovannucci and Vieira, 2017).
Price
The price of any product can be defined as an amount that is paid by a consumer while
buying. It is a very important component of marketing mix as it helps to assess the overall
profitability and survival of firm (Witell and et.al., 2015).
Nescafe has adopted non price competition strategy in India for youngsters. This is done
by maintaining uniform prices for all the products within Nescafe. It is also known that different
brands of Nescafe are priced differently depending on the manner in which they are made. The
company has further taken care of other factors such as labor etc. in order to ensure towards mass
production and reduce pricing so that it can be made more affordable to the age group of 16 to 30
years. But still the youngsters regard Nescafé as a premium brand and in spite of this it enjoys
good loyalty as well as acceptability among consumers as compared to competitors (West, Ford
and Ibrahim, 2015). The brand also has a higher bargaining power when the youngsters compare
its coffee with other rival firms. This has assisted the firm in launching some premium coffee
products for the young segment as well like premix, Gold, Caramel and Macchiato. Bru on the
other hand has focused on penetration pricing so as to capture target market of youngsters and
create high product sales (Zarkada-Fraser and Fraser, 2015). Its pricing is also less than Nescafe
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which has been done with intent to capture good consumer base, generate more sales and profit
figures.
Place
It can be defined as that location from where the product has been bought by consumer.
The concept is all about ensuring that product is available to consumer at right place and right
time. The places can be in form of malls, online stores, departmental stores or supermarkets
(Hilty and Slowinski, 2014).
Nescafe is a big household name among youngsters in Indian market as per the sales and
revenue that has been witnessed by the company. The company makes sure that it is able to meet
the demand of its products and reaches to the area where its target consumers are residing. It thus
maintains a good channel of distribution which is same like any other FMCG company (Brem,
Maier and Wimschneider, 2016). In this regard the two main channels followed by company are
 Manufacturing-C&Fagent-Distributors-Retailers
 Manufacturing-Bulk buyers-Consumers
It further encourages sales by offering trade discounts to bulk
buyers. It also makes use of two other products being Maggi and Kit Kat to boost sales revenue.
For example, if a merchant buys one product then he or she may get discount if a purchase of
other product is also made. Other than this, Nescafe has also kept its vending machines in
colleges, offices and those places where high footfall of youngsters is present. The company has
also set Café Nescafe’ and ‘Coffee Corners’ in metros as well as mini metros all over India
where the young generation can come and spend quality time with family (Nescafe, 2018).
Along with this, it has also been ensured by company that Nescafe products are present in all
variants across the outlets. This is as the youngsters look for variety. Moreover, the company is
also focusing on expanding number of outlets that are present in India. Its competitor like Bru
uses intensive distribution strategy to provide products to consumers in best manner. However
just like Nescafe, the products of Bru can be found easily in corner shops, department stores,
supermarkets and its own café outlets. Same like Nescafe, Bru has also opened its café chain in
Mumbai by the name of Bru world café.
Promotion
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It can be defined as all kinds of promotional activities that are used by company for
increasing market awareness about the product. This marketing mix element starts long before
the product is introduced in market (Witell and et.al., 2015). This is done so as to increase
consumer interest towards product and make them eager to find out what the item is all about.
Nescafe has focused a lot on this aspect of marketing mix in order to attract the youngsters. It
makes sure to carry out all kinds of communication with its consumers so that they are aware
about product offerings of company. It advertises the products through radio, TV ads,
newspaper, internet, social media sites among others which are frequent used by age group
between 16 to 30 years. It has also made sure that the logo remains same from the time of its
origin. This is most needed strategy to easily connect with consumers and imprint the company
in mind of buyers. Nescafe also focuses on releasing innovative advertisements that catch
attention of buyers. In this respect, the best adverting campaign was of Nescafe tune that was
launched in India a few years ago (West, Ford and Ibrahim, 2015). This strategy has been quite
successful in making an emotional connection with consumers and was quite popular among
youngsters. Other than this, it also holds press release sessions from time to time so that
consumers get aware about the product.
Just like Nescafe, Bru has focused on all kinds of marketing that are mentioned above. Other
than this, its advertisements generate a sense of warmth, happiness and belonging. This is clear
from its taglines such as Happiness begins with Bru; aur mood bann jaye (Angshu, 2011). It also
undertakes celebrity marketing by endorsing actors as brand ambassadors for the product.
People
This element is inclusive of all the employees who run the business operations of Nestle.
It is very essential to have right people in a company for maintaining overall future
sustainability.
Nestle has been involved in recruiting a large number of people to work for its Nescafe coffee
brand. They have been providing rigorous training to employees so that queries can be handled
by them and better customer service can be given (Brem, Maier and Wimschneider, 2016). On
the other hand, Bru has worked hard on the employees of research and development section so
that they can produce quality coffee as per needs and demand of consumers.
Process
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The systems and processes that are prevalent in any organization put an impact on the
execution of service. Hence it is very essential to have a well-tailored process in place so that
costs can be minimised.
The company has always made sure to provide best kind of coffee to its consumers. It thus
utilises advanced technology to get things done. The manner in which Nescafe uses vending
machines for serving coffee to young people who are in need on instant coffee and do not have
time to make coffee on their own. This simply shows that is in tune with the requirements of
Indian consumers (Zarkada-Fraser and Fraser, 2015). In the same lines, Bru has also focused on
its processes by use of technology so that good quality coffee can be produced. It has kept a wide
network of vending machines that are quite easy to operate.
Physical Evidence
It can be defined as material part of any services and includes all those elements that must be
incorporated in a business to make it tangible as well as measurable (Hilty and Slowinski, 2014).
Nescafe has focused on creating better connection with young generation by setting coffee
corners that has a logo of Nescafe on vending machines (Indiamart, 2018). The same strategy has
also been adopted by Bru. This is followed by making sure that the website has all details about
product offerings of company.
Partnerships –
This is the recent addition in marketing mix which focuses on gaining new partners and
managing the old ones well. In this regard, Nescafe has entered into partnership with local
farmers so that coffee beans can be generated in the country itself, for this, it has been involved
in training them so as to develop sustainable business practices (Coffee Farmers: Our Partners
in Progress. 2018). On the other hand, Bru has entered into partnership with leading coffee bean
suppliers within India.
How contemporary issue might effect on marketing activities in Nescafe
There is a presence of many contemporary issues that may put an impact on marketing
activities carried out by Nescafe. These are as follows;
Contemporary issue in social media is increased presence of consumers on sites like Facebook
and Twitter that has enhanced there communication with company. This is affecting the working
of Nescafe as it is now required to carry out marketing campaigns on sites such as Facebook,
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instagram and twitter. This can be in form of posting photos of new products on Instagram,
videos of Facebook. Other than this, it is further required to connect with audiences on these
platforms and also respond to their complaints and queries instantly (Witell and et.al., 2015).
In technological front, the issue is with respect to introduction of nee and advanced technology
from time to time. Nescafe should make use of new technological innovations in its marketing
functions. Nescafe is focusing more on other technologies such a big data to gather information
for their campaigns. This helps the company to find out what works and want not. Nescafe can
then redesign marketing plan accordingly.
Society or social environment is also impacting marketing strategy of Nescafe as consumers in
present times are more aware about what is good and bad for them. Hence Nescafe cannot
advertise those products that have high caffeine content and also eliminate harmful products
from there list.
CSR is also very important in marketing of Nescafe as consumers will not love its products if it
does not portray a community, environmental or sustainability message in advertisement
campaign (West, Ford and Ibrahim, 2015). This is on account of increased consumer awareness
about the issues that are preventing in world.
In the area of environment, Nescafe should reduce their carbon footprint while carrying out
marketing activities so as to lure consumers on account of being an environmental friendly
company.
RECOMMENDATIONS
Several recommendations can be suggested to Nescafe in 8ps of marketing. These are as
follows:
It is well known that Indians have a strong preference for tea and Nescafe has provided some tea
options as well. It should work more on this product segment and provide for some additional tea
variants. It should focus on its distribution segment and introduce some more vending machines
so that accessibility of Nescafe can be increased. The best place to set vending machines is on
highways where people might want to sip coffee while on a tiring journey. Some low priced
coffee variants can be introduced in this segment so as to lure the drivers as well as villagers who
live in nearby areas.
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In the area of promotion, Nescafe is required to sponsor some events or teams like Pro Kabbadi
in India so as to build good relations with public. It can also start the scheme of lucky draw
prizes so as to lure more consumers.
With respect to physical evidence the company should focus on making it stores, coffee shop as
well as website more creative and innovative. This can be done by use of bright colors and
design so that a new look can be given to Nescafé brand. In people element of marketing mix,
the company should strengthen its consumer service department both within its store and online
basis. This is most needed to gain an edge over rival firms. With respect to partnership, Nescafé
can form this relation with major media companies such as Facebook and Google so as to lure
the young generation towards its product offering.
CONCLUSION
It can be concluded from above report that Nescafe has got a well-established presence in
Indian market. It has used geographical, demographic as well as psycho-graphic segmentation in
Indian market and has targeted males and females in age group of 15 to 60 years by use of
product and image differentiation. It has introduced many kinds of coffee variants and provided
good pricing option to consumers. Its distribution and promotional strategies have also been
intensive one that has made the company a market leader in India. It is thus recommended to the
company that it should start providing tea to Indian consumers as well; set more vending
machines across highway and sponsor some events like Pro Kabbadi.
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