Marketing Mix of Nescafe and 4Ps (Updated 2023)

The Marketing mix of Nescafe analyses the 4Ps of Nescafe, which includes the Product, Price, Place, and Promotion of Nescafe. No matter how effective the packaging and promotion of a product are, the company will find it very challenging to market a product that doesn’t satisfy a consumer need. Nescafe owes much of its success to a potent marketing mix. Nescafe is an instant coffee brand made by Nestle. The Nescafe marketing mix shows that Nescafe is a strong product with global appeal. Let’s look at the 4Ps that make Nescafe’s marketing mix successful.

About Nescafe

• Type: Coffee brand
• Industry: Food and beverage
• Founded: 1938
• Founder: Max Morgenthaler
• Headquarters: Vevey, Switzerland
• Area served: Worldwide
• Key people: Mr. Suresh Narayanan (Chairman) and Ulf Mark Schneider (CEO)
• Number of employees: Over 2,75,000

Nescafe Product Strategy

Nestle is the parent company of Nescafe, one of the most successful companies in the world. It is well known for offering various products, including Nescafe. Nescafe has developed a lot over the years and is touted as the market leader in the instant coffee industry.

The history of Nescafe can be traced back to 1930 when its coffee specialist, Max Mergenthaler, and his team were asked to produce high-quality coffee that could be prepared by simply adding hot water yet retain its natural aroma. It then took nearly eight years of research in their Swiss laboratories until they finally managed to get the solution in 1938.

The final product was called Nescafe, a portmanteau of the names Nestle and Café. However, instant coffee did not become an instant success in Europe due to World War II. It was immediately exported to Great Britain, France, and the U.S.A. It later became a massive success in the United States, spreading its fame to Europe. By the 1950s, people were flocking to coffee shops for the product.

Later, in 1965, Nescafe introduced its Gold Blend version, significantly improving the original Nescafe, which used carbon dioxide as a preservative. The Nescafe Gold Blend brand was made of freeze-dried soluble coffee granules. In 1960, another brand called Taster’s Choice was unveiled. Over the years, the company has produced several brands named Nescafe. The following is the complete list of the brands.

• Nescafé Original
• Nescafé Classic
• Nescafé Gold Blend Half Caff
• Nescafé Gold Blend Decaf
• Nescafé Alta Rica Decaff
• Nescafe Blend 43
• Nescafé Blend 37
• Nescafé Black Gold
• Nescafé Classico
• Nescafé Decaff
• Nescafé Half Caff
• Café Parisien
• Nescafé Gold Blend
• Nescafé Suraya
• Nescafé Alta Rica
• Nescafé Espresso
• Nescafé Fine Blend
• Nescafé Partners Blend

Nescafé, a brand owned by Nestlé, offers a diverse range of coffee products.

The product mix of Nescafe in 2023 is as follows (Source)

1. Instant Coffee: This is perhaps the most well-known Nescafé product. It includes Nescafé Classic, Nescafé Gold, and Nescafé Taster’s Choice. These are available in various blends in both regular and decaffeinated versions.
2. Ready-to-Drink Coffee: Nescafé also offers ready-to-drink coffee products, popular among consumers looking for convenience. These include iced coffee and other flavored coffee beverages in cans or bottles.
3. Coffee Capsules & Pods: Compatible with coffee machines, these capsules and pods provide a quick and easy way to prepare a variety of coffee styles, from espresso to larger cups of coffee.
4. Flavored Coffee: This includes a range of instant coffees that come in various flavors like French Vanilla, Hazelnut, and Mocha, among others, catering to those who prefer flavored coffee options.
5. Whole Bean and Ground Coffee: Unlike traditional coffee brewing methods, Nescafé offers whole bean and ground coffee for drip coffee makers, French presses, and other standard coffee brewing devices.
6. Specialty Coffee: This includes a range of premium coffees, such as single-origin coffee and blends, typically marketed as higher-end products.
7. Coffee Creamers and Mixes: Alongside coffee, Nescafé also offers a variety of coffee creamers and mixes to complement their coffee products.
8. Coffee Machines and Accessories: Nescafé, mainly through its Nescafé Dolce Gusto line, provides premium coffee with machines and accessories designed to brew their specific pods and capsules.

Each product category under the Nescafé brand is tailored to different consumer preferences and coffee consumption habits, ensuring a broad appeal across various market segments.

Nescafe Place Strategy

Nestle follows the FMCG distribution strategy. This is quite effective because it breaks the bulk in a typical distribution channel. The two channels are

1. Manufacturing-C&F agent-Distributors-Retailers
2. Manufacturing-Bulk buyers-Consumers

The above distribution channels are typical of any FMCG company. However, Nestle enjoys a more robust distribution network than most because of the pull from the market. To encourage sales, Nestle frequently offers bulk buyers trade discounts to keep the sales high. The company also uses two famous products (Maggi and KitKat) to boost sales. For instance, when a merchant purchases one product, they might get a discount for buying an additional product. The only challenge for Nescafe is that it faces competition from other chocolate companies like BRU and Cadbury.

Nescafe’s place strategy is as follows:

1. Global Distribution Network: Nescafé utilizes a robust global distribution network, ensuring its availability in supermarkets, convenience stores, and online platforms worldwide, making it accessible to a vast consumer base.
2. Local Adaptation: In different markets, Nescafé adapts its distribution and product offerings to suit local tastes and preferences, ensuring relevance in diverse cultural contexts.
3. Partnerships with Retailers and Distributors: Nescafé forms strategic partnerships with local and international retailers and distributors, facilitating effective market penetration and accessibility in various regions.
4. E-Commerce Platforms: Emphasizing online sales, Nescafé has a significant presence on e-commerce platforms, catering to the growing trend of online shopping and offering convenience to customers.
5. Vending Machines and On-the-Go Availability: Nescafé products are widely available in vending machines and on-the-go retail formats, catering to consumers seeking quick and convenient coffee solutions in public places and workplaces.

Nescafe Pricing Strategy

Nestle has adopted the strategy of non-price competition. It ensures traders don’t take advantage and hike prices by maintaining uniform pricing for all its products, including Nescafé. It offers generous discounts to its distributors. Different Nescafé brands come with different prices depending on how they are made. Nescafe has estimated other cost factors, such as labor, and considered mass production to reduce the price and make it more affordable in India. However, being one of the premium brands, it enjoys a high stature and acceptability at a relatively high cost than its nearest competitors.

Nescafé’s pricing strategy is an exemplary blend of market-oriented and value-based approaches intricately designed to establish and maintain its position as a leading player in the global coffee market. Critical aspects of Nescafé’s pricing strategy include:

1. Competitive Pricing: Nescafé employs competitive pricing, positioning its products in an attractive way to consumers while maintaining a competitive edge against other coffee brands. This involves careful analysis of competitors’ prices to ensure Nescafé offers superior value.
2. Product Line Pricing: The brand strategically prices its diverse product range to cater to market segments. For example, Nescafé Gold is priced at a premium, targeting consumers willing to pay more for a higher quality product, while Nescafé Classic targets more price-sensitive consumers.
3. Psychological Pricing: Nescafé often uses psychological pricing and marketing tactics, such as pricing products just below a round number (e.g., $4.99 instead of $5.00). This strategy is designed to make the products appear more affordable and increase their appeal to cost-conscious consumers.
4. Geographical Pricing: Recognizing regional economic diversity, Nescafé adapts its prices to different markets. In countries with higher purchasing power, Nescafé may price its products higher, whereas, in emerging markets, the pricing is more moderate to maintain affordability.
5. Promotional Pricing: Nescafé frequently uses promotional pricing strategies, including discounts, coupons, and special offers. These short-term price reductions are aimed at boosting sales, attracting new customers, and encouraging the trial of new products.
6. Value-Based Pricing: Nescafé also employs value-based pricing, setting prices based on the perceived value of its products to consumers. This involves understanding consumer preferences and willingness to pay, ensuring that the price reflects the quality and benefits of the coffee.

Nescafé’s multifaceted pricing strategy is crucial to its overall marketing mix. It is tailored to reinforce its brand positioning, maximize market penetration, and sustain its global leadership in the coffee industry.

Nescafe Promotion Strategy

Nestle has used several advertising strategies throughout the years to make the product Nescafe appealing. In particular, it has used persuasive advertising, with an emotional aspect, to make it an instant success. Nestle runs severalseveral advertisements, and  TV commercials focused on making it a household name and premium brand. Another powerful tool is the widely known ‘Nescafe tune,’ one of the best advertising campaigns launched about 20 years ago.

The continuous advertising with bright promotions has given Nescafe a strong position in the instant coffee industry. Nescafe also focuses on producing high-quality products and experiments with many variants. It recently introduced the Nestea, which was instant tea, looking at the potential consumption of tea-loving customers. Moreover, Nestle also uses its other powerful products like Maggi and Kitkat to firmly push for Nescafe’s marketing strategy for a higher market share. In India, Nescafe has signed on Deepika Padukone as the brand ambassador and has introduced many ads, including Purab Kohli and Karan Johar, to promote the Nescafe coffee brand.

A significant portion of Nescafe’s promotion strategy involves the use of

• Advertising Campaigns
• Newspapers
• Internet
• Television
• Public relation activity
• Etc

Another promotion of Nescafe’s marketing strategy is excellent branding used to build high brand value for end customers. Besides some packaging and product changes, the Nescafé logotype has remained the same since its origin.

Nescafé’s promotion and marketing strategy is as follows:

1. Integrated Marketing Campaigns: Nescafé utilizes traditional and digital marketing channels, including TV ads, social media campaigns, and influencer partnerships, to reach a broad audience.
2. Customer Engagement Initiatives: The brand engages customers through interactive campaigns, contests, and loyalty programs, enhancing brand loyalty and encouraging repeat purchases.
3. Global and Localized Advertising: Nescafé tailors its advertising strategy to resonate with global audiences while creating localized content that appeals to regional tastes and cultural nuances.

Some Recent Video ads and Print ads of Nescafe are:

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