Coffee and Nescafe

August 12, 2017 Music

COMPANY PROFILE Nestle company started by HENRI NESTLE, he is a German confectioner and founder of Nestle, the world’s largest food and beverage company. And is one of the main creators of condensed milk. Nestle founded in SWITZERLAND. Nestle originated in a 1905 merges of Anglo-Swiss milk company, established in 1867 by brothers George Page and Charles Page, and Farine Lactee Henri Nestle, founded in 1866 by Henri Nestle. The Nestle company introduced “NESCAFE’’ in the market which was originated in Switzerland by Henry Nestle.

Aside from being the world leader in coffee Nestle is also one of the world’s top bottled water maker and one of the biggest frozen pizza makers. Nestle is also carries global food brands which includes Buitoni, Dreyers, Maggi, and Milkmaid. The NESTLE company is proud of its role in bringing the best food throughout the stages of Filipino consumers lives. The company employs about 3,000 men and women all over the entire Nestle world making No. 14 in the group and No. 3 in the region comprising of Asia. Nestle is the no. 1 company among the Asian countries.

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Nestle was developed a new process for dehydrating the concentrated coffee which vastly improved the quality. In entailed spraying a fine mist of the solution into a heated tower where the droplets turned to powder almost instantly. They then added carbohydrates in the form of dextrose dextrin and maltose which helped preserved the flavor. Nestle struggled to come up with a name for this new product which would inspire the public to buy it. They combined the word NESTLE and the Italian word coffee, cafe or cafe in hopes that the Italian inference would create an aura of romance and capture the imagination.

Nescafe got a flagship coffee brand and made income to Nestle mostly. Nescafe was market share about 80% from total coffee market about 12,000 million bath. The vision of the company is being the best in everything we touch and handle. The mission is to continuously excel to achieve and maintain leadership position in the chosen business. It was the largest industrial company. Let us see how it all started and how Nescafe was included in their products. HISTORY OF NESCAFE In 1867 Henri Nestle, a German chemist living in Switzerland, had invented a baby formula for women who couldn’t nurse.

By 1900 he had set up production facilities in several countries, including the United States, where he also made condensed milk. Over the next thirty years the company expanded their products to include powdered chocolate milk mix and other confectionary products. 1930 the Brazilian government approached Nestle to create a new instant coffee that would give the consumer another option and at the same time increase the dwindling coffee exports of Brazil. It took eight years but in 1938 Nestle introduced Nescafe.

Instant coffee was not a new idea; it was originally invented by a Japanese chemist named Satori Kato in 1901 and Early methods of making instant coffee involved brewing a batch of high-strength, concentrated coffee and then boiling it dry in stainless steel drums; the residue left behind was instant coffee. The heat involved in the boiling process destroyed most of the aromatic and flavorful properties of the coffee. When reconstituted in water the result was a pungent, bitter decoction that little resembled coffee.

It had been marketed and sold by various companies with disappointing results. Nescafe revolutionized the way instant coffee was made. Nestle struggled to come up with a name for this new product which would inspire the public to buy it. They combined the word Nestle and the Italian word for coffee, cafe or cafe in hopes that the Italian inference would create an aura of romance and capture the imagination. Apparently it worked; through an aggressive, and expensive, ad campaign that targeted the American housewife Nescafe became a huge success for Nestle and doubled its global market share.

World War II has re-bounded the country from the depression and did much to further the Nescafe name as instant coffee became a staple of the soldiers’ ration kits. While instant coffee accounts for only about 25% of coffee sales world-wide. Nescafe is bar far the dominate player in the arena. Nescafe remains the second most recognized brand name in the world, second only to Coca-Cola. When united state became involved in 1941 Nescafe evaporated and powdered milk were in heavy demand from American armed forces.

Nestle total sales jumped from $100 million before the war to $225 million in 1945 with the greatest increase accruing in North America where sales went from $14 million to $60 million. With the Nestle’s European and American branches were able to discuss future plans without fear of censorship and the company could begin to face the challenge of rebuilding its war torn subsidarities. Nestle also launched Nescafe and baby foods and began to research new products extensively. However because of World War II its popularity took longer than expected.

Soon after the next decade Nescafe was exported to France, Great Britain and the USA. American forces played the role of brand ambassadors in Europe because Nescafe was a staple in their food rations. Researchers focused on the three areas of Nestle considered most likely to affect the food industry, first, is the increase in world population in the future, second, the rising standards of living in industrialized countries and third, the changing social and economic conditions of raw material producing countries. Steadily through the rest of the 1940’s its popularity grew.

By the 1950’s almost every teenagers would be seen with a Nescafe cup as they troop to coffee houses to listen to rock n roll music and wasting their time in drinking a coffee. Some teenagers always drink coffee to lessen their problems and to relax. By 1965, Gold Blend was launched, which used freeze drying technology to make quality soluble coffee. A few years later a new technology was invented. This innovation captured more aromas and flavor from each single coffee bean and quiet rightly was the precursor to another breakthrough the ‘full aroma’.

In 1978, Nestle became a wholly owned subsidiary of Nestle S. A following its purchased of all San Mig equity shareholding in the company. Nowadays nestle is a robust and stable organization. Proud being best foods and beverages to the Filipinos. It employs 3,200 men/women and belongs to top 10 companies in the entire world. There products are either no. 1 or no. 2. In 2006, Nescafe launched the new coffee machine system “DOLCE GUSTO” (means “sweet taste” in Italian). Nescafe products are produced by Nestle. Nescafe holds a very large share of the instant coffee market in the Philippines.

The system allows consumers to make various style of coffee themselves (Cappuccino, Latte, Macchiato, Espresso, Lungo and etc. ) additionally hot chocolates and cold drinks can be prepared with the machine. The machines are now sold in more than 15 countries worldwide. Unlike other Nescafe products most dolce gusto beverages use roasted and ground coffee instead of instant coffee. In 2009 Nescafe unveiled a 43 million add campaign for Nescafe focusing on the purity of its coffee and featuring the strap line ‘COFFEE at its brightest’.

SWOT ANALYSIS STRENGTH -Pioneered the instant coffee industry when it introduced the coffee brand Nescafe. -Strong brand the company hot drinks portfolio includes a number of high recognition brands supported by considerable marketing and research and development resources including Nescafe, nesquik , and Milo. -Capacity to pass on cost, nestle size and marketing power enable it to pass on a significant proportion of the rising cost resulting from increasing coffee and cocoa prices to retailers and consumers. -World number one in other hot drinks Global leader in instant coffee, the company has a clear global lead in the important coffee sector, which is growing significantly in emerging markets. -High levels of research and development expenditure to develop its operations beyond Nestle nutrition division including hot drinks. -Solid financial base nestle has number of cost saving program. in place and as a result has been able to place itself in a position where it is able to afford sizeable investment in brand development. -Broad geographic coverage nestle is the leading player in hot drinks in every regional market except North America.

WEAKNESSES -brand name -limited flavors ( classic, decaf, master roast ) -Reliance on mass market the mass market positioning of nestle present significant difficulties in terms of tapping into the growing dean for premium coffee products. -Negative image -Increasing bias towards low margin products the relatively strong growth registered by emerging markets, where the company is largely represented by lower margin brands, is negatively impacting Nestle’s beverages’ operating margin. Meanwhile, higher margin Western European markets are being hit by challenging trading conditions. Bias towards caffeine-based products – Nestle’s hot drinks portfolio is biased towards products containing caffeine, a substance which has gained a negative image amongst many health-conscious consumers. OPPORTUNITIES -Leader in the market -Loyalty of customer -Emerging markets -The health trend while coffee has not received the positive health-related publicity of tea, its image became less resolutely unhealthy in recent years, with suggestions that it can help to prevent various conditions, including Parkinson’s disease.

Moreover, the company’s repositioning and substantial research and development infrastructure place it in a strong position to develop health-orientated new products. -The premium trend – while the mass-market positioning of Nescafe is an obstacle, the growing demand for premium coffee products is creating opportunities for the company to generate growth in mature markets through the development of brands and extensions, such as Nespresso and Nescafe Dolce Gusto. -The Cross-branding – Nestle’s diversified packaged food and beverage portfolio offers it the opportunity to develop brands from other categories in hot drinks.

Notably, it could further develop its confectionery brands in other hot drinks along the lines of existing products such as Aero Hot Chocolate. THREATS -competitors new flavor mixes -coffee machine competition -increasing cost -The competition from beyond hot drinks – the expansion and diversification of soft drinks, which are effectively targeting trends towards health and convenience, pose a notable threat to Nestle’s hot drinks products. -The Sluggish prospects in developed markets – market maturity and ggressive competition amongst retailers are set to constrain hot drinks growth severely in major developed markets during the forecast period. NESCAFE POSITIONING IN THE MARKET -They advertise their products in a wide variety of print broadcast and display media their most recent nationwide advertising campaigns where open up with Nescafe series and the Nescafe in the morning series. -They use taglines like ‘ START THE DAY WITH THE GOOD TASTE ‘ -They use a different products included of the Nescafe product name. They give meaning of the products -They use big star and a cute couple to advertise the product.. PRODUCT LIFE CYCLE INTRODUCTORY -First is to introduce the product (Nescafe), its brand and when Nescafe started did. -First Nescafe started in a bean. GROWTH -By introducing the product Nescafe, they begin in Nescafe instant coffee. Because of the demand of instant coffee, Nescafe created different flavors like ice coffee, cappuccino and etc. -By introducing different name of coffee like san Miguel coffee and different packaging of products. The Nestle company build a new style of Nescafe coffee to make their products became popular and to familiarize the said coffee. MATURITY -By the competing brands of coffee they create a new look or new face and new flavorings of coffee to introduce in the market. DECLINE -They are not in the line and decline because there product is in still in the market. MARKETING STRATEGY The Nescafe’s marketing strategies that brought them on top of other coffee brands here in the Philippines are the following: They introduced Nescafe 3 in 1 brown and creamy which is endorsed by Coco Martin. That is a huge marketing strategy because they compete against Kopiko brown sugar which is the 1st instant coffee to introduce with brown sugar in the market. -They introduced ready to drink coffee like the Nescafe Ready-to-Drink Mocha which is also available in coffee shops like Starbucks. – Nescafe also sponsors games and activities on TV and off cam to promote and advertise the old and new products. This marketing strategy creates good image and public relation.


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