Nescafe

Instant Coffee Brand

Table of Contents
Executive Summary ....................................................................................................................................................1
1

Introduction ..........................................................................................................................................................2

4P analysis..............................................................................................................................................................3

2.1

Product strategies ......................................................................................................................................3

2.2

Place strategies ............................................................................................................................................4

2.3

Pricing strategy ...........................................................................................................................................6

2.4

Promotion Strategy....................................................................................................................................8

2.4.1

Nescafe ...................................................................................................................................................8

2.4.2

Moccona vs Robert Timm ...............................................................................................................9

Recommendations ........................................................................................................................................... 10
3.1

Improve Market Share Strategies ..................................................................................................... 10

3.2

Competitive advantage.......................................................................................................................... 11

Conclusion ........................................................................................................................................................... 13

Reference List ............................................................................................................................................................ 14

Executive Summary
This report provides the marketing techniques of Australia instant coffee Market
by Nescafe to stay competitive against industry giant subsidiaries --- Moccona,
and local instant coffee --- Robert Timms. Based on the marketing mix strategy,
this report provides the analysis and evaluation of 4P (Product, Place, Price,
Promotion) of Nescafe compare with the Moccona and Robert Timms. All these
four elements are aimed to provide better product for customers to meet their
needs and achieve more profit for companies. In order to help Nescafe increase
the market share in Australia instant coffee market, this report also provides
recommendations for Nescafe to improve its product to meet customers needs,
tailoring its service to attract more loyal customers and retaining its competitive
advantages in the industry.

1 Introduction
Nescafe is a brand of instant coffee created by Nestle Company. According to the
research, Nescafe has already dominated the Australia instant coffee market with
high quality and low price (Nescafe Instant Coffee for 1-in-4 Australians, 2011),
allowing people to have a cup of good quality Nescafe instant coffee at home for
less than one dollar. Because of instant coffees advantages (convenient, cheap,
full of personality), drink coffee at home has already become a new coffee culture
(Morris, 2013). There are 41% of Australians who will purchase instant coffee
every month and 24% of them will purchase Nescafe (Nescafe Instant Coffee for
1-in-4 Australians, 2011). Moccona is one of the biggest competitors of Nescafe,
with 10% of Australians opting to p Moccona instrant coffee every month
(Nescafe Instant Coffee for 1-in-4 Australians, 2011). In addition, Robert Timms
is also a strong competitor for Nescafe as it is the local Australia instant coffee
brand with a long history and 1% of Australians will purchase Robert Timms
instant coffee every month (Nescafe Instant Coffee for 1-in-4 Australians, 2011).
This report will provide an analyses and evaluation of fundamental marketing
strategy of Nescafe compare with Moccona and Robert Timms through marketing
mix. What is more, this report will also provide recommendations on business
strategies to Nescafe to help increase Nescafes market share in Australia instant
coffee market.

2 4P analysis
2.1 Product strategies
According to Bowman (1996), products have to meet customers needs. What is
more, different customer have different needs, because of this, the company
should understand different customers needs and try their best to satisfy
customers taste. Also, the company should create a good brand imagine, this can
make customer trust them, become their loyal customers and purchase their
products. Nescafe have developed different kinds of product for customer to
meet their needs with 10 series: Blend 43, Espresso, Mild Roast, Decaf, Gold,
Greenblend, Short Black, Azrea, Caf Menu, Dolce Gusto and 42 different products.
However, Moccona only have 5 series and 22 different products and Robert
Timms only have 6 series and 17 different products. Nescafe has more series and
products for their customer to choose from allowing the customer to find almost
all the favors they want for instant coffee with Nescafe.

Additionally, Nescafes taste is also very good, according to the review websites,
most of customers are satisfied with the taste of the Nescafe and many of them
are willing to try new favors of Nescafe. However, Moccona also have a very
famous favor that was deeply loved by the customers: it combined the taste of
Latte and Cappuccino. In addition, most of Moccona instant coffee packed in glass
jar; it is famous for its smooth, rich taste and iconic glass jar (Moccona, 2012).
However, the cost of glass jar is higher than cardboard carton, making cost of
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Moccona production higher than Nescafe and Robert Timms.

Although Nescafe has a lot of different products to meet customers needs, Robert
Timms has a very special product that both Nescafe and Moccona dont have in
their product line. The Coffee Bag series is Robert Timmss special product, it is
like a tea bag but with coffee, customer only needs to place the coffee bag in a
cup, add boiling water and wait for three to four minutes, then, they can have a
perfect cup of coffee (Robert Timm, 2014). This coffee bag series is very
convenient for customers.

2.2 Place strategies

According to Kotler et al. (2009), the product should be putted on the place that
customer can easily get. It is very important, because most of customer will
choose the product they can find easily, customer do not like to waste time on
seeking product, especially for males. Because of this, the place for products in
market can even affect the sales of products. In Coles and Woolworth, Nescafe
instant coffee has been put on the place that customer can easily find, they are
always in the middle of the shelves. What is more, Nescafe instant coffee even has
their own shelves in these markets for promotion, which can be seen in figure 1.
This can attract customers attention very easily.

Figure 1: Brand location of Moccona and Nestle in Coles, Rundle Mall

Figure 2: Brand location of Nestle and Robert Timms

Moccona is also a big brand of instant coffee in Australia instant coffee market
and is the biggest competitor of Nescafe, Moccona instant coffee also been putted
on the place that people can easily get on Coles and Woolworth, but it does not
have their own shelves. Robert Timms is not a big brand in Australia instant
coffee market and only 1% of Australians will purchase Robert Timms instant
coffee every month. Because of this, Robert Timms always been put on the place
that customer cannot find easily in the market. In Coles and Woolworth, Robert
Timms always been putted on the top of the shelves or the bottom of the shelves.
This is show in figure 2, where Robert Timms is place in the top right corner of
the shelf, almost unnoticeable.

2.3 Pricing strategy

Price is an important factor to measure a product in marketing. Price controlling
is one of the most effective and direct methods to compete with competitors.
These coffee brands have different pricing strategies of their products to satisfy
customers needs and achieve larger profits.

Nescafe applies a marketing skimming strategy in Australia due to its target

customers for instant coffee belonging to the upper class. However, this strategy
did not achieve their goal to expend their target customers to upper middle class
by reducing coffee prices (Guven, 2010). Therefore, Nescafe is focusing more on
maintaining coffee prices due to the magnitude of prices changes are
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imponderable. In addition, Nescafe has the largest market share in Australia and
its competitors are quite weak to have more market share, hence, it provide
Nescafe a merit on its competitors to remain prices while developing new
products. Moreover, Nescafe is at a pricing leadership position and its
competitors are not powerful to impact Nescafe to establish flexibility in pricing.
The prices of Nescafe instant coffee range from $3.26 to $12.56 per 100g in early
2014 (Woolworth Online Shopping Australia, n.d.).

Comparing with Nescafe, the prices of Moccona instant coffee are more expensive
due to it has different market segmentation of target customers. The prices of
Moccona coffee range from $6.5 to $12.84 per 100g (Woolworth Online Shopping
Australia, n.d.). Eckersley (2013) states that customers of Moccona are more
likely to be of higher social and economic status with higher education levels and
incomes. In addition, according to Paish (2012), Australian instant coffee
customers are more likely to choose better taste of coffee, 64% of customers
compromise on taste over price. 85% customers believe premium coffee brands
tested better than other generic coffee brands. Therefore, Moccona using this
customer psychology produce premium coffee and build premium image,
charging higher prices.

Robort Timm has week competition with both Nescafe and Moccona, so it has to
reduce prices to maintain or expend its market share in Australia. Hence, it

charges lower prices of instant coffee ranging from $4 to $5.16 per 100g
(Woolworth Online Shopping Australia, n.d.). Therefore, Robert Timm is quite
sensitive of price changing.

2.4 Promotion Strategy

In terms of promotion strategy, three coffee brands have similar approaches,
such as advertising and general selling at shops. However, they may have some
differences on several aspects discussed below:

2.4.1 Nescafe
One of the reasons that attribute Nescafe to being such a successful coffee brand
all over the world is their outstanding promotion strategy. Nescafe has multiple
promotional techniques depends on different market environment. Nescafe has a
wide range of advertising mediums, including print media, Internet and
television. They also broadcast different advertising campaigns to promote the
interaction between the brand and its customers (Amada 2007). In addition,
Nescafe usually runs sale promotions consist with the launch of their new
product (Islam 2013). Techniques such as giving cash back or giving gifts (e.g.
mugs) with the product used by Nescafe in order to promote the desire for the
customer to purchase their products. Moreover, Nescafe also sponsor public
events such as some cultural nights at Valentine day. The beauty of being a
sponsor is not only benefiting the society, but also promote their brand
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sufficiently (Islam 2013).

2.4.2 Moccona vs Robert Timm

Moccona is inspired by the fact that coffee can give people romantic feelings, and
established a website on Facebook for people to share their romantic stories
(Dunn 2011). This is an innovated technique using the modern Internet
technology to promote their brand awareness. In addition, providing sample
coffee in the shopping mall or on the street is another way for Moccona to attract
awareness of the customer.

Due to the low share in market and low profit, Robert Timms use all kinds of
techniques to promote its brand awareness instead of promote the sale of its
products. Their advertisements are primarily focused on delivering the concept
that their brand is the local brand in Australia and they have more
understandings on the demands of Australians than another brands. According
to Amada (2007), as a sponsor, Robert Timms is the official coffee supplier for
the 2000 Sydney Olympic Games, which helped to promote their brand
awareness sufficiently.

3 Recommendations
3.1 Improve Market Share Strategies
Nescafe did a very good job in market segments. A marketers aim is to divide the
members of a market into different groups according to some shared
characteristics (Kotler 2005, p. 49). It has launched a variety of different
products and expands their product lines to fulfill each segment. According to the
reviews from the Whirlpool website, Nescafe Gold Blend and Blend 43 are the
most recommended instant coffee. These two product lines are most profitable in
Nescafe and this has become the most important market segment for Nescafe.
Both of the products have become the daily needs for customers. Nescafe should
launch a bigger package for the Gold Blend product line. On the other hand,
Nescafe should slowly reduce producing the products that not many people
would buy or stop production. By reducing the loss and expenses, Nescafe can
concentrate and put more effort on the products that could increase their profits.

In addition, Nescafe website has shown that Nescafe coffee under Cafe menu and
Blend 43 product lines can be used as cake ingredient (Nescafe 2014). With this
knowledge, Nescafe could develop a new product line for baking segment and
come with a small pack as easy bake. It could bring difference from competitors
and increase its market from coffee to baking goods, creating a new competitive
advantage. It will also help to change the image of instant coffee, as people always
keep in the mind that instant coffee is low class coffee.
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Besides, Nescafe Australia should release sachet coffee package as they did in the
other countries such as Malaysia (Nescafe Malaysia, Nescafe United Kingdom,
2014). In the Malaysian market, Nescafe has the 3 in 1 Gold Blend sachet coffee
package and in United Kingdom Nescafe it has 2 in 1 original flavor allowing
consumers to pick the preferences that they want. Both products can reduce the
time to make it and it is easier then products have in Australia.

As Coffee is daily need for office workers, Nescafe could increase the market
share from the big organizations. Nescafe could extend their market segment to
the office market, where they can have a long-term agreement with the big
organization or office to supply coffee for them. Besides that, Nescafe could hold
events such as coffee trucks, where the coffee truck will be located nearby office
buildings, during peak lunch traffic times, it will give free coffee tastings to the
people and promote Nescafe as a friendly organization. This will enable Nestle to
increase product awareness.

3.2 Competitive advantage

According to Kotler (2012, p.134) that competitive advantages are companies
that can create different ways to perform which cannot be easily duplicated by
the companys competitors. Nescafe is a strong brand name as it is associated
with Nestle, which is a known brand name with good reputation in the
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worldwide. Nescafe has used a long time to build a good reputation and
contribute to a sustainable environmental, increasing the image of Nescafe.
Additionally, Nescafe has strong grasp over the good quality of the coffee and the
process of its products, allowing consumers to feel safe when purchasing Nescafe
products.

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4 Conclusion
In conclusion, it can be deduced that Nestle with its Nescafe product line is on the
ball within the instant coffee industry, beating its closest competitors Moccona
and Robert Timms be a clear margin, with 21% of the market share compared to
Mocconas 10% and Robert Timms 1%. The strategies employed by Nestle to
improve its market share are deemed to be most efficient and ideal with the
companys current standing. This can be attributed with the company coming to
an understanding of how to market its product to any of its consumers with its
wide array of products to suit any taste.

(2148 words)

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