Nestle Italy Study Analysis

Topics: Coffee, Marketing, Coffee preparation Pages: 4 (949 words) Published: October 29, 2011
Nestle Case Study Analysis:
1.       What is the structure of the Italian coffee market?
         About 750 national or regional coffee rosters, and coffee roster coffee-houses. They bought coffee directly from growers or through agents or importers.
         National Coffee Roasters normally bought beans from growers and sold their products to wholesalers on cash and carry basis; food channels such as supermarket, small stores or street vendors, coffee houses, restaurants, hotels, and coin operated machines

         Regional Coffee Roasters bought beans from importers or agents and sold their products to end-consumers through food channels
         Local Coffee Roasters bought beans from importers and sold to wholesalers.
         Coffee Roasters Coffee-Houses bought beans from importers and sell coffee to end consumers directly.
         Two segments:
         Family segments: They were end consumers, which had 80% of coffee dollar consumption and 31% of volume coffee consumption.
         CHR segment: They were coffee houses restaurants, and other institutional outlets, which had 20% of dollar coffee consumption and 70% of volume consumption.
         Types:
         Normal: Family segment consumed doubled of coffee than CHR segment (69% vs. 31%)
         Decafe: Family segment consumed slightly higher than CHR segment (58% vs. 42%)
         Instant: Family consumed 7 times higher than CHR segment (88% vs. 12%).
         The market had low entry barrier.
         The top four national coffee roasters dominated about 42% of the coffee market. The next four dominated about 10% of the market.  
2.       Assess Nescafe’s current market position in Italy.
         It had less than 1% of market share in Italian ground coffee market. (0.836 tons vs. 137 tons of total market)
         Instant Coffee Market Share in Italy in 1988: Nestle had 77.7% of market share in terms of volume, and it had about...
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