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Introducing coffee culture in Bangladesh: The Nescafe way

Aug 11, 2014



Nescafe's Marketing Activities in Bangladesh

  • INTRODUCING COFFEE CULTURE IN BANGLADESH: THE TEAM OFFLINE Fableeha Bushra Choudhury RH19 Rubyat Tasfia Rahman RH29 Nishadul Haque Nihal ZR31 Aanisha Mahmood RH59WAY
  • Mother Company Started its journey in Bangladesh1994 Factory located in GAZIPUR People employed directly and indirectly1650
  • Bangladesh has never been kind to the coffee industry as far as popularity or sales are concerned Since the British rule, the country has been predominated by the taste of tea as the warm beverage required for many during breakfast, with the snacks or even as the beverage for socialization The real taste of coffee is rather appalling - Sanjeeda Nusrat, Brand Manager, Nescafe
  • 2. industry and competitor analysis
  • 2. industry and competitor analysis Bru, MacCoffee, Coffee Crown and, Maxwell House and Bean Coffee. 94% 6% MARKET SHARE Nescaf Others Currently, Nescaf has a business of around 300 tons annually.
  • 3. market analysis DEGREE OF BUYER INVOLVEMENT INEXPENSIVE therefore, habitual + BUYER BEHAVIOR shelve stocking + reminder ads MARKETING STRATEGY
  • 3. market analysis WHILE BUYING perceived brand difference Since coffee consumers do not make heavy decisions about what brand to buy, non-stop ads serve the purpose of creating BRAND FAMILIARITY rather than BRAND CONVICTION. Accordingly, if this process is followed by a purchase, this behavior is likely to turn into a habit over time due to the reason that coffee taste is suitable to have an addiction towards it. As a result, consumers act according to habitual buying behavior if they keep buying Nescafe Classic owing to habit formation, a familiarization or a routine.
  • 3. market analysis WHILE CONSUMING perceived brand difference Significant perceived brand differences: Consumers could buy Nescaf without much evaluation but they evaluate the quality of coffee while consumption. According to products strength or taste, next time, a consumer may switch his/her brand prefer and can purchase one of the competitors of Nescafe Classic. they may switch brands between Nescaf Classic and Bru. Brand switching occurs because consumers seek variety and want to try a different coffee. Therefore, consumers act according to variety- seeking buying behavior. For instance,
  • 3. market analysis TARGETTING A SEGMENT The focus is urban young professional cosmopolitans with contemporary lifestyles. Taste and aroma of the coffee, accordingly quality is the important element for them. Nescaf emphasizes keeping them active throughout the day. 2ND SEGMENT is the best fit!
  • 3. market analysis The introduction of coffee in a jar was initially a failure in Bangladesh. Priced at a premium and sold in only family packs formerly, the jar coffee had almost no market share during the times of introduction in the Bangladeshi market. A handful of consumers who were passionate about coffee only purchased the jars and the company check- listed the launching of Nescaf as a loss venture.
  • 3. market analysis Nescaf gained some of the expected market after the launching of the mini-jars, but yet it lacked a strong customer base to ensure a good prospect for the future of the company. The target market of coffee was never the low income groups, as the positioning of coffee is to the youth or to the upper societal class. In order to penetrate the market, the primary objective of Nescaf was to get the people used to the taste of coffee. Because tea is the main competitor of coffee and the prevalent beverage, the objective could not be accomplished overnight.
  • 3. market analysis The taste of real coffee is rather bitter to the normally practiced tea drinks usually served and drunk all over the country. That the vending-machine idea was a penetrating strategy for Nescaf, the taste of coffee was lightened with a lot of milk and sugar in the recipe to deem acceptable by the general public.
  • 3. market analysis Otherwise known as the on-the-go coffee pack, the recipe of this pack is also exactly the same as of the vending-machines. The only value migration that occurs here is the idea of do-it-yourself for the customers, to have a significant increase in their involvement.. The target population ages from 17 to 20 years, which is the adaptive age for tea/coffee drinking as considered by Nescaf. This market is desirable in order to be tapped by Nescaf as it is believed that once a customer becomes brand loyal to Nescaf, s/he provides a lifetime of revenues to the company.
  • 3. market analysis Nescaf uses a premium pricing strategy to signal its quality and strong brand attributes. The pricing strategy is different for each pack size. Package pricing is done for Nescaf Classic Jar, Nescaf Bondhu Classic Sachet and Nescaf 3 in 1 Coffee. Other than these three products, Nescaf has some other products like Coffee mate, Nescaf 200 gm pillow pouch etc. These products are imported and are available in big chain stores. Nescaf 200gm jar 460 Tk Nescaf 100gm jar 260 Tk Nescaf 50gm jar 135 Tk
  • 3. market analysis Nescaf 3 in 1 8 Tk Nescaf 1.8 gm Bondhu Pack 5 Tk Nescaf 0.9 gm sachet 2 Tk
  • 3. market analysis pricing strategies VALUE ADDED PRICING This involves attracting value- added service to differentiate the companys offers and to support charging higher prices. The price of Nescaf 3 in 1 has a higher/cup price than any other Nescaf pack. Yet people tend to buy it more and 3 in 1 pack is very popular among the young generation as it is easy to make without any hassle, and it gives extra value to that product as milk and sugar is mixed with the classic Nescaf.
  • 3. market analysis pricing strategies COST BASED PRICING It is setting prices based on the costs of production, distribution, and selling the product with a fair rate for effort and risk. As Nescaf imports their product and raw materials mainly from abroad, they cannot sell it at a low price. So, they sell their product based on expenses they need to bear after the import
  • 3. market analysis PLACE AND SALES POINT Nescafe products, in most cases, are found on shelves of various departmental stores and the smaller packs are found even on roadside tea stalls.
  • 3. market analysis PLACE AND SALES POINT Pack Size Target Users Out of home pack mostly serving the bulk users, i.e. fast foods, restaurants etc. In- home pack, mainly for the relatively frequent coffee drinkers. In-home pack, meeting the daily usage need of households in an affordable way. Containing right mix of coffee, creamer and sugar to have right taste of coffee just by adding hot water, convenient pack size of 14 gm allowing the consumers to carry it with them and have coffee anytime, anywhere. For 2 persons, affordable pack with broader consumer base.
  • 3. market analysis PROMOTIONS - TVC Cholo shobai Anytime, Anywhere Get, Set, Rock Jaago
  • 3. market analysis PROMOTIONS Print Media NESCAF has been advertising in Prothom Alo, The Daily Star, Star Weekend Magazine etc. to generate awareness among the consumers.
  • 3. market analysis PROMOTIONS In Store Communication Trade posters, Shelf talkers, Bunting, Danglers are the main elements used for in-store communication. Nestl appoints merchandisers for installing these materials. These are also called Point of Sales Materials (POSM).
  • 3. market analysis PROMOTIONS Outdoor Activities NESCAF is currently using shop signage as outdoor promotion. These help shoppers remember the brand while they are making purchases.
  • 3. market analysis PROMOTIONS Sampling Sampling is a very useful tool to ensure trial of coffee. Wet sampling is basically providing samples to consumers in ready to drink form. It is done through vending machines and also through different agencies. NESCAF has yearly budget for free sampling and is actively utilizing it with a view to familiarizing people with coffee taste.
  • 3. market analysis PROMOTIONS Consumer Promotions Till now NESCAF has adopted two ways of consumer promotion. 1. Through sponsoring different events related to the target consumers, i.e. NESCAF Unplugged, NESCAF Campus Carnival and NESCAF Battle of the Giants. 2. Through providing specific incentives with the pack, i.e. NESCAF mug, NESCAF branded spoons, T-shirts, Caps etc. Besides, the company has also tried out some cross brand promotional activities like promoting NESCAF and Coffeemate together in the NESCAF dream couples contest.
  • TO END WITH Nescafe has seen a steady growth in market demand for its products. It has successfully been able to change customers attitude towards coffee and has been able to convert tea drinkers to coffee drinkers with the entry of international coffeehouse franchises in to the market that Nescafe has worked so hard to build, the future of Nescafe products are at stake however, as such, Nescafe has resort to even more creative means to compete and gain market share or even retain its current turnover.. Will this be the start of a new era of marketing for Nescafe?