Market Segmentation for Nescafe Coffee
The present era has changed a lot and urban people needs more forms of consumable goods. By 2050, there will be a rapid transition from rural areas to urban areas. Satisfying the need of ultimate consumers is possible through agricultural goods and environmentally sustainable production systems. Along with traditional products available in the market, NESCAFE from Nestle Corp. Ltd is a beverage which lowers down the anxiety levels. This product Nescafe was launched into the market with an aim of creating sustainability and making contributions towards the social and economic status of the society. The coffee management services are undertaken by the coffee farmers and target for the betterment of society at large.
Nescafe is the prominent brand of Swiss giant Nestle and its name has been derived from the Nestle and Café. This coffee was originated in Brazil and popular in more than 180 countries. The Nescafe brand promises its customers with fresh start and great coffee. This brand is a motivation and inspiration for the target market that will belong above than 16 years of age. Today, its target market has get 100 percent natural instance coffee. Its specific objectives include (Piehler, Schade & Burmann, 2018)-
- Understanding the Nescafe Coffee Completely
- To identify the market segmentation, target market and positioning strategies.
Market segmentation refers to the division of a market into small groups who have distinct needs, behavior or characteristics. Nescafe had been targeted to the morning people. Global campaigns have been launched in the marketplaces which aim at 16 to 25 years of age group (Tufekci, 2014).
Geographic Segmentation- Nescafe has made two divisions- South and North. In the northern region, the consumption of coffee is higher and south, consumers prefer the roasted and hard coffee. Nescafe brand has also segmented the cities, according to population size. Coffee is provided to urban-sub-urban and rural people. Nescafe has adopted the marketing strategy for diversification of its resources to rural areas (Dutta, 2012).
Demographic Segmentation-Demographic factors are some of the popular base for segmenting the consumer groups. Consumer wants and needs are often close to demographic variables. Every age group, gender, families and different age-groups with income has been segmented. The Nescafe brand has targeted 30 plus segments and enforces buyers to do impulsive buying for its products and services (Yorulmaz, 2016).
Psychographic Segmentation- The upper class of society enjoys the express or the products and Mild Roast. These are quality Nescafe products that can assess by individuals with different lifestyles and Nescafe has been successful in producing the instant beverage line.
Green Marketing Strategy Critique and Analysis
Behavioral Segmentation-Nescafe coffee is for the users who seek to be recharged. Starting the day positively-enjoy Nescafe coffee in the mornings. The market can be segmented into heavy coffee drinkers, first time users and potential users. The Market can be segmented into heavy coffee drinking product and medium drinkers. Nescafe has a broad plan for capturing the heavy to medium customers of its product (Pillai, 2013).
However, there is no ideal approach for segmenting any market. There are certain principles which include- segment size, ease of identification, segment size and strategic effectiveness and stability. The overall market for green goods can be operated profitably due to the green market segments is in question because of the segments approach used. Firms have clearly reported that communication can happen ecologically to conscious customers and green products can reach them effectively. There are various approaches where in the conscious customer has been separated from the mass market and this is due to the identification ease, operational planning and strategic usefulness (Sharma & Iyer, 2012).
Nescafe as a brand of Nestle, is heavily focusing on the sustainability issues in a given target market. Nescafe can take the maximum benefits of the market and can achieve a remarkable growth. The customers are between the age of 25 to 35 which recognizes the coffee as a green product and shows widespread acceptance towards the product (Uddin & Khan, 2018).
Green marketing is comprised of different activities which ensure the market and product exchange with minimal amount negative environmental impact. It can be defined as the holistic management procedure which is responsible for identifying, anticipation and meeting with the wants of customers and companies in an effective way (Fuentes, 2013).
- Supply Chain and Communications-There have been several sources which have been pointing out the procedures of green marketing. This encompasses planning process, implementing and developing, pricing, promotion and distributing the products in a way which meets the criteria of customer needs and achieving the organizational objectives(Flynn, Koufteros & Lu, 2016).
The main goal behind the green marketing is to give customers the significance of protection of the environment. This also places an emphasis over the long term associations based on both sides of long term communication channels. It is also the duty of stakeholders to be environmentally responsible.
- Product-Understanding the target market requires evaluating the greenness as an apt selling variable. The marketers must analyze how green marketing can be incorporated into the marketing mix. Green initiatives must be taken under the Maslow Hierarchy needs for business. According to the Maslow’s theory, most basic needs must be met in first order and then consideration can be given to higher needs. That includes adopting the green principles and values which matter to the customers (Gligor, 2016).
- Price-Pricing is an essential marketing tool and it is an identification of coffee products which makes it different from the competitors. Principle of volunteering is currently being successful. However, in the context of green marketing, distinguish between the green image and product designation must be explored (Hove-Sibanda & Pooe, 2018).
The green marketing strategy involves undertaking the inventory analysis, which has been developed in 1970s and must account for the environmental impacts of procurement, packaging and distribution and disposal. The data and statistics collected from the external market can change the way in which products are being made, transported and sold or development of new products.
It must be noted that complex environmental problems must be solved through organizations alone. There is a need of stakeholders to pool the collective skills and resources and capabilities. The marketers form the strategic partnerships with employees, retailers, suppliers and general public. Marketing managers need to find about the green marketing strategies. How the company will generate revenues and profits by improving the green target market (Reimann & Ketchen, 2017)
Competitive business environments can vary depending on the demands and requirements of customers. Businesses are heavily impacted through the regulations and policies. Most of the businesses implement green marketing strategies and consideration to social and environmental roles and high pressure from the government. This is also a methodology of reducing the costs. Competitive advantage can be easily gained through the several green marketing strategies. The Nestle company understands the interlink association that exist between the environmental, social and stakeholder and customer and proactive business. In order to achieve sustainable competitive advantage, environmental thinking must be integrated into different marketing aspects. This can be simply achieved through the implementation of green marketing models.
The enterprises applying the green marketing principles can retain the better competitive position in the market. The competitive position of an enterprise and green marketing principles are co-related in a statistics manner. Several factors are identified for the green marketing implementation (Kujawa, 2008). These include business performance, market position and corporate responsibility. A linear relationship has been described between the dependent variable (green marketing principles) and independent variables (production efficiency, market position and social responsibility). The multidimensional descriptive models can be analyzed to obtain the casual relationship which exists among the variables. Businesses must become sustainable or likelihood of overtaken by the competitors. The companies operating on the environment must prove the environmental performance. It is due to this reason that expectations of the customers are met with the business objectives (Tachizawa & Wong, 2015).
The brand needs to consider the different areas for measurement of environmental impacts, enterprise culture and environmental design. The eco-competitive advantage can be given to the organizations and create new environmental culture which begins with the changes in enterprise culture, product design and analysis with competitor products and services. This green marketing cycle will identify all the processes and business impacts by providing the correct information and also the competitive environment (Cucchiella & Koh, 2012).
By accepting the green marketing principles, this can increase the value of company’s products. The company can easily gain the competitive edge and gets into new markets to cope up with the environmental pressures. Different ways have been outlined for achieving the enterprise strategy. The present state of the issues must be examined and current trends of green marketing and responsible business must be done. The aim is to demonstrate the potentials for getting competitive advantage and implication of green marketing applications into corporate practice. Global targets must be set for reducing the energy, material and water. These must be the measurable targets.
Strategic sustainability practices are costly to be implemented and green practices result in significant directions for the consumers. For Instance-Consumers will be unable to see the emissions by using the energy appliances. Environmental benefits cannot be measured easily. Few strategies like distribution strategy are subject to manipulation (McMeekin & Southerton, 2012).
- Address Supply Chain Delivery- The risk of social and environmental impact is caused through improper management of supply chains. This can be avoided through the enhanced practices and that can benefit the business. The Nescafe has identified key risks and sets on the sustainable practices and needs practice recommendations on smooth transition (Jarzabkowski, 2003).
- Impact on commodities- Water, climatic change and food crisis are some of the increasing problems. Consumers must be made informed and responsible.
- Leverage New Sustainability Product line- The FMCG (Fast Moving Consumer Goods) is important for the economic growth of Asia. It is also the crucial component of portfolio due to the presence of middle class population. Companies are at risk-social and environmental impacts if supply chains are not effectively managed.
- Business risks- Indian Companies have little knowledge on environmental, business and environmental risks when compared with those of western companies. The progress is limited in risk management due to the scrutiny from financiers, civil society and due diligence. The transformation of the market initiatives are to be taken and commodities must be produced at the local costs and measured with reduced social and environmental impacts. ASIAN companies need to compete with specified targets and noticeable progress reports (Domínguez-A., Jimenez, Quinones & Ulloa, 2015).
- Reposition sustainability brand image- The demonstration of sound leadership in packaging and promotional strategies can reap maximum benefits for the System. The sector is vulnerable to extreme conditions and emphasizes the need of financiers and companies to have a better understanding and management of different risks.
- Sustainability standards-Active participation is required through the stakeholders to jointly implement, develop and promote green marketing. FMCG companies need to assess the portfolio companies, banking clients and new investments as the priority and access to more capital towards sustainable practices.
Nescafe coffee brand is focused towards the improvisation of quantity, quality and sustainability. The Nestle Company has undertaken ongoing initiatives for declining yields, climatic changes and diseased trees. A vast range of supportive measures have been provided for tackling the issues and improving the livelihoods of farmers (Edwards, 2017).
The commitment to Society-By 2020, Nescafe has planned to improvise quality and 220 million plantlets of coffee will be distributed to the farmers. By 2020, the company has decided to source the coffee from the Nespresso and sustainable quality program and therefore improving farmer social welfare. By 2020, Nescafe will be able to source more than 90,000 tons which will be compliant of sustainable agriculture principles. The Nescafe has been active since 2016, in more than 10 countries. The farming practices were adopted to help the farmers with training, technical assistance and distributing plantlets. The Nescafe global plan is to combine the support for farmers, compliance with sourcing guidelines and enhancing the environmental impact. Assistance has been provided for the sustainable management of ecosystem. The plan also targets to empower young people and women. Nescafe believes that revival of human society and resources can create the positive impact on a long term basis. There can be an association with different stakeholders for active participation in these coffee sustainable products.
The Nescafe began assimilating sustainability in the business model and has launched a unique coffee approach for its customers. The Nescafe brans has launched sustainable quality program throughout its supply chain. The Nestle Company has been able to drive the positive impacts and sustainability strategy from 2014 to 2020. The company has been able to accelerate the sustainability focus and create massive benefits for the enterprise, environment and society at large. The company has been targeting the coffee sourcing areas for social welfare, disposal of used capsules. The company has been working closely with the stakeholders and combining expertise and skills for fostering positive impact. This comprises of international experts in the domain of sustainability. The Nestle board helps to shape the Nescafe coffee brand and this will create sustainability strategy and serves the partnership basis (Cozzio, Bullini Orlandi & Zardini, 2018).
Sustainability is fundamental to future of company and society with which it is working. The company intends to produce the highest quality coffee beans for the society and therefore creating the social, environmental and economic value for farmers, society and shareholders. Building on the Nestle program of shared value creation, high enforcement of sustainable development has to be done. This implies coffee farming till consumption. Nestle company has a direct source of coffee beans from farmers in countries like Thailand, Vietnam and Philippines. The Nestle Company is offering the fair price structure for ensuring the continuous supply of quality coffee and generating long term business.
Nestle aims at producing lower cost product to consumers and thereby reducing the competition. Understanding the concept of Differentiation is to decrease the complexity, risk and lower attractiveness for customers who are in search of discounts. Nestle has tried to position the Nescafe as superior quality commodity. Nestle messages will attract the retailers and whole seller and can reflect the picture differently and clearly. Any company which is in the business will face tough competition in this market. Nestle is a conglomerate company and faces tough competition from global market places. A key areas in every business is the selection of strategy on which the further developments can be done. The present has been characterized through hyper competition. There are certain phenomenal combinations that will have the negative impact on the environment. Sustainability issues must utilize all the resources and same conditions for upcoming generations.
In the present study, a summary of green marketing principles and concepts related with it has been given. The multiple statistical techniques like correlation and regression has been used to reveal the associations, despite of different variables existing in the environment. The Aim of the contribution is to prove the association between implementation of the principles of green marketing and competitive position of the organization. There is a statistical associations between enterprise competitiveness and green market principles. The associations can be directly or indirectly influenced through the different factors and this can be the subject for further research. The green marketing principles must be analyzed and supplemented with indication of marketing strategy, to achieve the growth and development.
Conclusion
The Nestle Company needs to find the implementation of green marketing strategies and difference between the ownership structures. Based on the above information, the association must be established between green marketing principles and corporate structure. A market survey can be conducted for finding the influence of incentives on substitute product.
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