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).
'Gift'
Nescafe enter
US in 1938
Exportes to
france
Nestle
introduces
Source: dostoc.com
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Advertisment
enter japan in
1961
enter china in
1938
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:
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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
'Gift'
Nescafe enter
US in 1938
Exportes to
france
Nestle
introduces
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Advertisment
enter japan in
1961
enter china in
1938
NESCAFE SHARE
Chart Title
Nescafe occupies
72%
73%
16%
11%
Instant Coffe
Canned Coffe
Fresh Ground Coffe
Market segmentation for nonalcoholic hot beverages
5%
1%
8%
tea
40%
instant cofee
espresso
rost and ground
46%
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other
APPENDIX B
Product life cycle for coffee
Coff
ee
Coffee
Introduction growth
maturity
decline
Boston matrix
Stars
Nescafe
Magi noodles
Question Marks
Milk
Milo
Nesvita
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