Company overview of Nescafe
Nescafe is referred to a highly popular brand of coffee whose parent organization is Nestle. Being a Fast Moving Consumer Goods the mentioned coffee comes in different forms. Both the company as well as the FMCG product is highly popular all over the world. Thus it can be easily understood that the company posses huge consumer base. Nestle had developed the mentioned brand in the year 1930 with the help of initiatives taken from the Brazilian government. Being a sustainable company, one of the major objectives of the company was to help the Brazilian farmers prevent wastage of the substantial surplus of the annual coffee harvest. In the year 1938, Nestle introduced the new product under the brand named Nescafe. Nescafe is a soluble powdered coffee that had become America staple food during World War II. In the year 1965, the company invented another version of coffee under the brand name Nescafe gold which was freeze-dried coffee (Das 2014). Over the year several marketing techniques has been adopted by the mentioned organization some of which had helped the brand to gain high popularity. Currently the company sells its products across 189 countries. Its vast global presence along with its high brand reorganization is considered as two of the chief reasons behind its yearly profit. In this report, demonstration of the understanding as well as application of various consumer behavior concepts and theories will be performed by analyzes the facts gathered in assignment 2. Based on the analysis, three strategic recommendations will also be provided in this report.
In order to analyze the current marketing strategy of the mentioned FMCG product, in the following paragraph, 4P marketing mix has been performed.
Product
Being a recognized brand of one of the most successful company across the world, Nestle, Nescafe is currently the market leader in the instant coffee industry. The chief objective of the brand is to satisfy the taste bud of the consumers. The brand has introduced various brand of coffee keeping in mind the demographic needs of the consumers. Nescafe offers the consumers with various types of coffee that includes Nescafe original bend, Gold Blend Decafe, Gold Blend and others. Even the Decafe blend posses lots of types like Half Decafe. Various types are also available when it comes to cappuccino that includes unsweetened, Skinny and Decaffeinated (Sparks 2014). In order to satisfy the taste of all the consumers and cater to all types of coffee lovers across the world Nescafe has introduced express, latte of different kinds of blends, vanilla, mocha, Irish cream and others. Thus it can be stated that the information obtained from the previous research that Nescafe caters to all.
Critical analysis
Price
The price of the product offered by Nescafe depends on its quality. Considering the fact that the target consumer of the company is chiefly the middle class as well as higher middle class population, the price range of Nescafe is not kept too high. The price mainly depends on the blends (Mortimer 2016). For instance the price range of Nescafe gold is a little higher than Nescafe original. In order to cater to even the lower middle class consumers, Nescafe sells their product in the form of sachets which will be affordable to them (Rosin, Stock and Campbell 2013).
Place:
Nescafe has gained high popularity due to its brand reorganization and global presence. The Brand is present in 189 countries. Along with majority of the developed country, the brand is present in a good number of developing countries like India and China. The organization maintains a vast distribution cycle and hence is available at both metropolitan cities and underdeveloped suburbs. The technique of distribution followed by the company is similar to other typical FMCG company. Majority of the products are supplied through retailers who distributes the products to local shops as well as international retail stores.
Promotion
Nescafe emphasizes on the promotion since successful promotion is of the chief reason behind its worldwide reorganization. They makes it sure that they have made all possible communication possible for the consumer to enhance the awareness of their products. They uses both offline as well as online media for promoting their coffee. While offline product includes radio, television, PR activities. Newspapers and others, online promotion includes pay per click advertisement, search engine pop ups and promotion through social media platforms (Badland et al. 2014). Online promotion and PR activity also enhances the connections with the customers and they get to know the products closely. The company mainly focuses on the taste its various blends of coffee offers to the consumers. However, as per survey, approximately 75 percent of the consumers are found to prefer being aware of the nutritional value of the product.
Advertising
Nescafe invests highly on Advertising. The total expanses of 2017 that has been spent by the company includes 112.3 million USD (Jones and Morgan 2014). Pint as well as media advertising represents the core of promotional technique of Nescafe. Considering the fact that the organization is present globally, online advertising is a major promotional too of the mentioned brand. In order to enhance the awareness of the product and communicate directly with the consumers, the Management of Nescafe uses popular social media platforms like facebook and LinkedIn in order to enhance the awareness of the consumers as well as to understand their specific requirement from the brand.
4P marketing mix of Nescafe
Personal Selling
When it comes to personal selling the mentioned brand uses distribution channel suppliers in order to reach the products to the end consumers. The role of distribution channel suppliers is to supply the products to the retailers who finally help the product reach the end consumers. The company also recruits salesperson to promote the products and services to the consumers directly by organizing campaigns. Along with that, in order to establish and maintain direct contact with the consumers, the company uses social media platforms. Besides that regular blogs and advertising videos are posted in the official site of the same.
Discounts and promotions
Considering the fact that the mentioned organization is a highly recognized one, no frequent discounts and offers are offered by the Nescafe Company to its target consumers. However, during festive season like charismas and new year, in order to gain competitive advantage, New year offers discounted price to its consumer (McEachern 2017). The form of promotional offers given by Nescafe includes percent-off deals, rebates, coupons and others. The management of Nescafe uses both offline as well as online media in order to promote deals and mail coupons to its loyal as well as target consumers. the brand uses exterior signs as well as instore signage to draw consumer attention towards the discounts (Australia 2014). The chief objective of the management includes enhancing the revenue as well as the cash flow as well as attracting new consumers.
Public Relations
The public relation of the company is quite well-maintained. The chief sources of public relation includes televisions, newspaper and social media platforms. According to researchers, the chief difference between advertising and unpaid public relationship sources the management of the brand posses no control over the massage conveyed to the consumers (McEachern 2017). Since nestle is a highly sustainable company, no major scandal has been promoted by the PR media.
Direct marketing
Direct marketing includes both the aspects of sales promotion as well as personal selling. It can be defined as an interactive communication tool with the consumers where the massage of the company seeks or implores a response from the targeted consumers (Mindrut, Manolica and Roman 2015). For direct marketing the two chief strategy used by the Nescafe company includes the email as well as direct mail. These massages are sent to the consumers with special offers or calls so that the consumers can know about the limited tie deal as well as new product launches (Insch and Cuthbert 2018).
Market Communication Mix of Nescafe
Event Sponsorship
Event sponsorship is considered to be a major tool for promoting a brand and gain competitive advantages over the competitors. Nestle provides sponsorship opportunities to events that are focused on social issues like water, rural development as well as nutrition. Being a popular brand of Nestle, Nescafe also sponsors social events. This in turn, not only enhances the good will of the company but also enhances the awareness of the consumer about the brand.
From the above discussion, it can be clearly understood that Nescafe is one of the most popular coffee brand across Australia. However, due to high competition from its consumers like Brew, Mount Hagen and Douwe Egberts, the management of the organization needs to follow the bellow mentioned strategy in order to maintain as well as enhance its consumer base in the following years.
- Firstly, the Nescafe brand need to establish its own online selling platform in order to attract more global consumers as well as local consumers. Online selling platforms help an organization to obtain a hug pool of consumers. Considering the fact that the mentioned FMCG brand already cater its consumer through online marketing sites like Amazon, big basket an others, given the huge popularity of the brand, the company should invest on opening its own online store where it will be able to cater to the huge number of online consumers (Peck et al. 2013). Having own online store will lower the investment of the company on third party logistics and this in turn will enhance the profit of the company. Not only that, the company will also be able to track the specific preferences of the consumers. This tracker will help the company to understand that popularly of the blends (Vorley, Fearne and Ray 2016).
- Secondly, given the huge market demand of the product, the company should strengthen its distribution channels as well as suppliers. From the above discussion it can be clearly understood that the demand for the product is gradually increasing. Hence the company needs to posses the capacity to meet the demand of the consumers. The current inbound and outbound logistic of the company as well as the supply posses the risk of failing to meet the same. Inability to meet the demand will have both short term as well as long term consequences on the company (Lockrey 2015). The short term consequence includes loss of potential revenue, while the long term revenue includes reduced consumer base of the same. In order to prevent this, Nescafe should invest on enhancing its number of suppliers as well as enhancement in the quality of inbound as well as outbound logistic of the company so that it can deliver its products to each and every outlets as well as to individual consumers within the stipulated amount of time.
- Considering the fact that the chief focus of the brand during promotion includes the taste of the coffee, the company is losing the attention of several health conscious consumers. These consumers are opting for tea or green tea instead of Nescafe considering that the former is healthier option than the latter (Ravensbergen et al.2016). This fact has the potential to be highly risky for the brand. Due to obesity issue, majority of the population of Australia are getting inclined towards a healthy lifestyle. In order to eradicate the issue, the brand should convey more campaigns as well as promotional events that will be entirely focused on the health benefits of coffee. In order to peruse the consumers, the company can also take the help of healthcare professions who will educate the target consumers of the brand bout the important of consumption of coffee on a regular basis.
- Considering the fact that the brand solely focus on delivering the best quality product to the consumers. the price range of the product sold by the Nescafe Company is a little higher than its competitors (Parsons 2013). This fact has the potential to impose adverse impact on the competitive advantage of the company. In order to deal with that, Nescafe should more often launch attractive offers and discounts so that more and more consumer can buy the product. This tactic will not only enhance the consumer base of the company but will also ensure an enhancement in the revenue of the brand.
Reference List
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