Nestlé Corporation Nescafé Instant Coffee

“Great Start of a Day”

Created By: Laura Greff, Enni, Sean, Cherry Class: International Business

Teacher: Rolf ButzDate: Oct. 26, 2010

Fun Facts

• People drink 4,600 cups of Nescafé per second.

• Grounds for divorce• Coffee Baths in Japan • 450,000 farmers work with Nescafé worldwide

History

• 1866 - Nestlé established Switzerland by Henri Nestlé– 1900 – started operating factories in United States,

Germany, and Britain. • World War I – Difficulties to find raw materials– During World War II Nescafé became a staple in the army

• 1938 - Max Morgenthaler introduced Nescafé– There are 8 lines in Nescafé – Nescafé Classic, Gold Range, Espresso, Premium Range,

Decaf, Specialties Range, Frappe, 3 in 1

Industry Analysis

• 80% of American adults, 27% of teenagers drinks coffee

• Coffee is mostly drank by people between the ages of 45-55

• The coffee industry has over 108 million consumers

• Only five companies buy world’s 50% of coffee beans

Non-Alcoholic Hot Beverage Market Segmentation

1%

46%

8%

5%

40% Espresso

Instant Coffee

Other

Rost and Ground

Tea

SWOT Analysis

Strengths• Target Marketing– Nescafé caters to the needs of all its customers

around the world

Weakness• Brand Name– Nestlé had a number of recalls in 2008• Recalls affect all products of Nestlé

SWOT Analysis

Opportunities• Emerging Markets– China and India have the fastest growing coffee

markets

Threats• Growth of coffee industry– There are over 17,000 coffee shops in the U.S.

Competitors

• The Best part of waking up– Founded in 1850 – P&G bought the company in 1963– Number one selling instant coffee in U.S.

• The 4 dollar coffee– Starbucks is moving in the international game and

is gaining ground in countries such as China– It is making its way into the instant coffee market

Competitors Cont.

• Maxwells Coffee– “Good to the last drop”– Started in 1892 by Kraft• Kraft is Nestlé’s number one competitor

• Holds the second largest market share of coffee industry

Global Market Expansion

1938: Nestlé introduces Nescafé.

Exported to France

Nescafé enter U.S in 1938

Advertisement enter Japan in1961

“Gift” enter China in 1988

N

Global Market Expansion Cont.

13%

19%

9%15%10%

9%

8%

4% 13%

2008 China Beverage Market

Coffee

Tea Beverage

Fruit& juice

Carbonated Soft Drink

Milk

Beer

Water

Wine

Other

Coffee

Tea

• Nescafé works with coffee bean growers to help improve crop yield

• Nescafé has changed its marketing technique to suit the Chinese tradition of “Gift Giving”

Challenges

instant coffee Canned coffee Fresh Ground Coffee0%

10%20%30%40%50%60%70%80%

73%

11% 16%

2005 China Coffee market size

market size

Nescafé occupy 43%

Short-Term Recommendations

• Marketing -Give People lucky prize• Change the Glass Jar to new materials– Only use the glass for decorative gifts– Safety Hazard

• Make Nescafé’s Special Mug– This mug would be a coupon for future purchses

Long-Term Recommendations

• Vending Machine - The first coffee vending machine was created in 1946

• Give people free Nescafé• Expand Its Distribution Chain

- Can stop the fake products appear in market

Thank You

We hope that we give everybody a “Great Start of a Day”