The company that is going to be analyzed in the report is Nestle with its brand Nescafe. Thus, the industry is consumer goods, the product instant coffee. The two core areas chosen for the analysis are market segmentation and targeting and promotion.
Market segmentation and targeting. In the major part coffee is usually preferred by both male and female at the age of 20 to 45 approximately. Children are usually not allowed to drink much coffee, since caffeine is believed to provoke special hyper reaction. Older people, in turn, are trying to avoid coffee because at this age they are taking special care for their health.
Thus, the typical segmentation in the sector can be represented in the following way:
men and women from 20 to 45;
single/married/married with children;
elderly people who prefer decaffeinated coffee.
Economic: low, middle and premium segments;
regular buyers, random buyers;
those who prefer to drink coffee at coffee bars/ those who prefer to drink coffee at home / those who prefer take-outs;
those who prefer to drink coffee alone/ in a company;
people who lead active style of life/passive style of life;
people who prefer status/price/taste/convenience;
businessmen/students/working people. (Cateora, 1990, p.116)
Thus, it is obvious that market segmentation is follows four major criteria in order to distinguish certain groups and clusters. Nestle’s segmentation is quite thorough what helps the company to understand the needs of each separate group and satisfy those needs in the best possible way. Moreover, thorough segmentation allows the company to focus on specific segments, or simply saying to distinguish target segments.
Thus, Nestle’s “Nescafe” target segments are:
1. Married and married with children people who prefer to drink coffee alone at home and buy instant coffee on a regular basis. It is caused by the fact that those people are oftentimes busy and they do not have time to brew their coffee. Moreover, those who have children usually face the problem that if they leave the coffee in the coffee machine, their children might tempt to drink it. Moreover, oftentimes there is too much coffee left in the coffee machine, which means the unnecessary waste. Yet, if you leave, it is going to be not fresh. Englishmen, however, prefer only fresh coffee.
2. Students who simply do not have coffee machines and prefer instantaneous coffee, which they can easily make at any given time.
Generally, the main target segment of Nescafe are people with high or more than average income. Moreover, it is important to notice that Nestle targets younger audience. That is why , it is very important for the company with such a strong brand as Nescafe to distinguish the core values for this type of customers. Such values are individuality, independence, pleasure, self-confidence. Thus, the brand is positioned as the one, which has extraordinary taste that you want to enjoy every day.
Promotion. Segmentation and targeting are preliminary stages that allow the company to understand what tools of promotion will be the most effective for the given brand. In our case, Nestle uses various tools of promotion.
Large-scale advertising. Nescafe is advertised using a wide range of different media – TV, radio, printed media and Internet. Corporate site and brand site are believed to be an excellent tool of promotion, as it can host a good deal of detailed information about the brand. In fact, Nescafe has its own web-site separate from the site of the producer Nestle. Nescafe site was created in order to give its target audience ampful information about the product and the brand in particular.
Moreover, the company believes TV commercial as an excellent method to keep brand awareness and brand recognition about the brand on the highest level. The key message that is being delivered is that Nescafe is a wonderful taste that needs to be enjoyed and enjoyed. Global commercial portraying woman in a peculiar garment trying to become unnoticed by her husband to be able to enjoy Nescafe alone is the best proof of that. Thus, we can see that brand managers of Nescafe are emphasizing physical qualities of the product, specifically its taste.
Publicity. Publicity is achieved by creating different kinds of informational grounds. It can be sponsorship of certain events that are covered by different types of media. It can be informational articles discussing the problem of coffee-drinking. It can also be different special events that are also covered in media. For instance, in 2004 in England there was a contest the winners of which could experience a luxury balloon flight and stay in the country hotel house. The event was transmitted via TV.
This was a great informational ground and thus the cause of publicity. The main message that is delivered via publicity is that Nescafe is a reliable trustworthy and responsible brand. Thus, drinking Nescafe one can be sure of its exceptional quality. In other words, publicity is aimed to ensure good reputation of Nescafe and ultimately to form a strong brand loyalty of customers.
Sales promotion. Especially popular are different contests and point of sale promotion, where the company used sampling to enhance brand awareness, to increase the level of initial ties and stimulate people to experience the taste of Nescafe. For instance, a lot of corporate Nescafe mugs are constantly given with the purchase of certain brand products.
Moreover, special place is given to merchandising, as the company recognizes the importance of the fact that the product should be very appealing while being on the shelf, especially it concerns the instant coffee in bags, which is usually purchased at the very last minute. So, it is important that it is situated closer to the cash register
In such a way, brand promotion that used by the company is based on the variety of tools. Moreover, it is important to keep in mind that those tools should be congruent with the target segments. Target segments, in turn, might be distinguished only as the result of thorough market segmentation using as many criteria, as possible. Nestle makes emphasis on advertising, different PR activities (sponsorship, special events, publicity), and sales promotion.
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Nescafe official web site. www.nescafe.com
Nestle’s official web site. www.nestle.com