Nescafe Brand Management

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Nescafe Brand Management
Brand Audit Objectives, Scope, and Approach
Objectives: We seek to understand the health of Nescafé’s brand equity and basis of positioning in order to generate strategic recommendations based on this analysis. Scope: In order to meet our brand objectives we will seek to understand Nescafé’s brand equity, core brand values, and associations in the United States. We believe that analyzing parts of the global Nescafé brand is pivotal to being able to comprehend the brand’s influence in the United States. Approach: We will focus mostly on secondary research for our brand audit, but we will use primary sources whenever possible. Additionally, a marketing research project was undertaken by the group to assess the brand equity locally within the Washington Metropolitan area. Background about Brand

The idea to create soluble coffee originated in 1930 when the Brazilian government approached the Nestlé brand with a proposition. (Nescafé 2011) The Brazilian Coffee Institute wanted to create a coffee that was soluble in hot water in order to increase the use of coffee and thus help increase Brazil’s exports. A Nestle executive named Max Morgenthaler set up a team, and it began experimenting different ways to meet that request while still maintaining the coffee flavors that everyone loved. After seven years of research in Switzerland, Nescafé was born.(Nescafé 2011) The name stems from a combination of Nestlé and café, the Italian word for coffee. It was introduced in Switzerland on April 1st, 1938 as the world’s first commercially successful soluble coffee; hugely popular with Allied forces during WW2, it became a runaway success thereafter. (Nescafé 2011 ) In the 1960s Nestle introduced a new brand, Taster’s Choice, in the United States instead of Nescafé. In 2003, the company reintroduced the Nescafé brand to the United States in the form of Nescafé Taster’s Choice. Currently, Nescafé is in the middle of making a significant investment in sustainability under its so-called “Nescafé Plan,” which was launched in 2010. (Nescafé 2011) A leader in the coffee market, Nescafé is the third most valuable beverage brand after Coca-Cola and Pepsi; it is the 30th most valuable brand in the world overall, according to Interbrand. Nescafé Taster’s Choice is the leader in soluble coffee in the United States, with a 40% market share. (Reuters 2010) Background about industry

The first coffee houses opened in Istanbul in the 16th century; by the 17th century they spread throughout Europe in Venice, London, and Paris. (NCAUSA 2010) Today, coffee is traded as a commodity on the New York Board of Trade. The United States and Western Europe are the largest consumers of coffee. Most coffee is produced in developing countries such as Africa, Asia and Latin America in a “coffee belt” that encompasses the tropics. (Nescafé 2011) After Brazil, Vietnam and Colombia are the biggest producers of coffee inputs. Coffee employs “60 million people around the world including farmers, brokers, roasters, marketers and retailers.” (Nescafé 2011) Instant coffee is a fairly new innovation, having been created by Nescafé in the late 1930s. Consumer Analysis

• Consumers of instant coffee feel they need coffee in order to jumpstart their day to a good start. They are busy individuals who do not have the time to brew coffee or go to a coffee house. • They drink instant coffee because it is convenient and cost-effective relative to other methods of coffee consumption. • Given the relative homogeneity in the industry, consumers select instant coffee brands on the basis of brand values; they want to consume brands they share values with. • American coffee consumers have unique needs:

• Consumers prefer savoring coffee while working: they want a wide variety of sweet flavors (vanilla, hazelnut vs. French roast) • Consumers want lifestyle solutions: they expect their coffee brands to be packaged with neat coffee and food recipes, a forum for...
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