Introduction:

Nescafe, being a product of a famous brand nestle have been successful in capturing a high market share of instant coffee. The word Nescafe is actually the portmanteau of two words that are “Nestle” and “café”. Max Mergenthaler along with his team members had worked hard for almost seven years to make coffee powder. On April 1, 1930 for the first time in Switzerland, they succeeded. It was launched in the United States with a brand name known as Taster’s Choice Nescafe. However, the brand name was once again changed and was then known as Nescafe Taster Choice.

Marketing structure

Marketing strategy

Nestle is one of those products that is considered to be people and brand oriented rather than being system oriented. Their marketing strategy is designed in a way that gives importance to the needs and lifestyles of their consumers. The product is of high quality they also try to improve their pricing strategy and distribution networks. Along with all these priorities they are able to generate annual profits (Wentzand Newbery, 2010).


Source: dostoc.com

Target market

The company is mainly targeting the class of consumers that are socio-economic. Those people who accept that Nestle provides products that are of good quality are its potential consumers (Student Murat’s Blog, 2003). However, the prices of its products are not very low, and therefore, not everyone can afford it. Following is a strategy that they use to choose the market that they plan to target:

  • Quality realization
  • Education
  • Income level

The positioning strategy:

Three steps that are used by Nescafe in their positioning strategy are:

  • To identify the correct competitive advantage
  • To choose the correct competitive advantage
  • To select the correct completive advantage

This is then communicated effectively by the company and then delivered to the selected market position. It is strongly believed by nestle Nescafe that they are unique in their product and its benefits.

Brand Positioning Strategy

  • The composition of the product
  • The distinguishing position
  • Being concerned about the health of its consumers
  • Combination of taste with quality

Market Audit

  1. External Audit

Threats and opportunities were discovered when External environment of Nestle was studied. These are discussed below:

Opportunities

  • Growing market for fair trade hot drinks

Threats

  • The suppliers have greater control over its customers, therefore have a bargaining power.
  • Intense competition
  • Price war
  • Cannibalizing

2. Internal Audit

Strengths

  • The range of products by Nestle Nescafe is according to the wants of its customers and it

References:

Appendix A

NESCAFE SHARE

Market segmentation for nonalcoholic hot beverages

APPENDIX B

Product life cycle for coffee

Coffee

Introduction growth maturity decline

Boston matrix

Stars Question Marks

Nescafe Milk

Magi noodles Milo

Nesvita

Nestea Nestle crunch

Cerelac Milky Bar

Cash cows Dogs

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