I grew up in a tea-drinking community. Coffee, for me, was an exotic out-of-home drink meant for an occasional indulgence. Fast forward to today; I can’t live without my morning cup of strong Nescafe Classic. This thought took me back to the 20th century when ‘It All Started.’
Nescafe started in Switzerland in 1938 as a soluble coffee powder to solve the problem of excess coffee production in Brazil. As coffee grew in popularity, Nescafe introduced new variants like coffee beans, ready-to-drink coffee, and milk coffee to cater to a wider consumer base.
Valued at $13.9 bn by Interbrand in 2020, Nescafe is the market leader in instant coffee and the 4th most valuable beverage brand globally. It has over 5,000 products and is available in over 180 countries, with 5,500 cups consumed every second. Much of its credit goes to Nescafe’s marketing strategy that includes inspirational advertising strategy, range of products, maintaining affordability for cost-conscious consumers, and utilizing strong distribution network of Nestle.
Nescafe in India – How It All Started
Nescafe entered India in 1963 with the promise of a hot cup of coffee in just 5 seconds. For a tea-drinking nation like India, instant coffee was a novel concept. The brand introduced Nescafe Classic for North, East & West & Nescafe Sunrise for South, a 70:30 mix of instant coffee and chicory.
An early memorable Indian ad of Nescafe used peppy music to create positive associations with starting the day with Nescafe through the tagline – Taste that gets you started out.
Nescafe Marketing Strategy & Mix (4Ps) in India
According to Nielsen, Nescafe felt the heat from Bru in 2007 summers when Bru gained around 7% market share from Nescafe in instant coffee in Apr-Jun Qtr over the previous Qtr. Analysts attributed the loss to the aggressive launches of more miniature packs & new cold coffee variants by Bru during summer in North, East & West.
This story will break down all the 4Ps of the marketing mix of Nescafe and decode the marketing strategy that has helped the brand maintain the leadership for last many decades.
Promotion – campaigns that set it apart
To regain market share, Nescafe launched its mega campaign ‘Know Your Neighbour’ in 2010 by roping famous Bollywood Actor Deepika Padukone & TV actor Purab Kohli, with the tagline – Switch on the best in you.
Research suggested that interactions among people were declining due to their fast-paced lifestyles. Neighbors were not engaging in more extended conversations anymore. Nescafe saw this as an opportunity to become relevant in consumer lives through this campaign. It was a series of ad spots featuring celebrities highlighting the need for connections over a cup of Nescafe.
The ads introduced new flavors, pack sizes & occasions to enjoy coffee with neighbors and guests. The digital page ‘Know Your Neighbours’ became the most significant fan page for Nescafe globally, with more than 3.5 lakh fans in 2011. Also, the Nescafe Facebook fan page with 2.2 million fans became the most popular page for Nescafe in the world in 2012 (source: Annual report).
Before I mention the campaigns that followed, let’s look at the evolution of Nescafe master brand positioning in India:
1990s: Taste that Gets You Started Out (Energetic start to the day)
2010-2013: Switch on the Best in You (make connections)
2014-2016: It All Starts with Nescafe (Cup of resolve in daily struggle)
2017-2019: It All Starts with Nescafe – Badal Life ki Raftaar (Energy boost for fast-paced life)
2020-2021: It All ReStarts with Nescafe – Karne Se Hee Hona Hai (Get started again after lockdown)
Let us now deep dive into the campaigns that helped the brand stay contemporary. Nescafe was losing its point of differentiation globally due to the rising competition. Hence, for its most extensive global repositioning exercise under the Name ‘Redvolution,’ Nescafe in 2014 created a new Tagline – ‘It All Starts with Nescafe.’
The new strategy would bring all the brands under the master brand, Nescafe, with consistent brand imagery worldwide. The Red Mug would feature in all communications to evoke familiarity & brand recall. A master brand strategy helps increase brand equity, lower the cost of media & forge longer-lasting customer relationships.
Cup Of Resolve
In India, the “Redvolution” was introduced with the ‘Stammering Ad’ launch by a stand-up comedian. The ad depicts how a stand-up comedian converted his weakness of stammering into strength with the help of Nescafe. The brand was positioned as the ‘Cup of Resolve’ with the #ItAllStarts campaign.
This was an evolution from the earlier ‘make connections’ positioning to reflect the changing values of youth. Social media was extensively used to generate interest. In the launch year itself, the ad generated 50,000 Facebook shares and 2500 consumer-generated stories. The ad was among the top 10 YouTube ads in India in 2014.
To date, there are a whopping 6 Mn views on the ad. It was also a clear shift away from a celebrity to appeal to the digital natives & connect with their daily struggles.
For the next two years, Nescafe was positioned as a brand enabling the youth to fight against all odds to stay resilient. The cartoonist ad in 2015 won hearts again for Nescafe. It highlighted the use of social media to drive success in a creative career, thus striking the right chord with the young TG.
Nescafe collaborated with MTV for Nescafe Labs – a platform to bring the untapped creative talent of India under one roof and help them learn from industry experts. The team came up with another advertising marvel in 2016 with the ‘RJ Rishi’ ad, where a budding RJ rose from desperation to hope to attain success.
Nescafe collaborated with Red FM through the program ‘Nescafe Mornings’ to drive home the idea of the morning cup of resolve. Slogans were cleverly used to reflect consumer values. The suitable usage of taglines & slogans helps create a higher brand recall. The new slogan #StayPut stitched together all the three stories of Nescafe as the ideal ‘Cup of Resolve.’
Badal Life ki Raftaar
2017 was the time for another repositioning under the #ItAllStarts umbrella. The new slogan ‘Badal Life ki Raftaar’ was targeted at a younger TG, which is always pressed for time & wants to achieve a lot in life.
Nescafe placed itself as a companion in the journeys of hard-working students by giving them the energy boost required to succeed in their fast-paced lives & not miss any fun. Outdoor campaigns around the new theme were planned tactically based on the places the younger TG frequently visited.
Karne Se Hee Hona Hai
2020 was the year for yet another positioning induced by COVID-19 with the ‘Karne Se Hee Hona Hai’ slogan. It urged people to make a fresh start after re-opening of the economy post lockdown. In a twist to its global tagline, it created ‘It All Re-Starts with Nescafe’ – an effective way to stay relevant.
The mega campaign was a success, helping Nescafe gain about 3% market share in the Coffee market in 5 years.
Product – A cup for every need
Nescafe consistently introduced new products to increase both users and usage in line with its pull marketing strategy. To emulate the tea drinking experience in the North, it launched Nescafe 3 in 1, a premix of coffee, dairy creamer, and sugar. Nescafe Mild was launched to appeal to consumers who did not like the strong taste of coffee.
In 2012, foaming mixes of Cappuccino, Vanilla Latte & Choco Mocha were introduced to provide more variety to the youth as part of the mega campaign. Nescafe Gold was re-launched in 2017 to serve consumers with evolved tastes.
In the South, Nescafe Sunrise went through multiple product enhancements to closely match the taste of filter coffee. Limited edition Nescafe Sunrise Rich Mountain blend was launched in 2010 to create excitement. Sunrise Strong was launched in 2012 with a specific coffee-chicory blend specifically for the people in Andhra Pradesh. In 2016, Sunrise Insta-Filter with dry decoction granules was launched to offer the authentic South Indian Filter Coffee Taste.
To maintain coffee leadership, Nescafe introduced a host of other complementary products like the Nescafe vending machines for offices, stalls, and E Nescafe – a smart coffee maker to prepare instant hot coffee.
Price – The perfect mix of affordability and choice
Nescafe has customized and adapted its pricing strategy to serve the needs of the value-seeking Indian consumers. It straddles across multiple price bands starting from the Rs 2 sachet pack. This helps increase penetration by generating trials & thus increasing affordability.
Product prices vary based on the variant, ingredient, flavor, size, and type of packaging like sachets, cartons, cans & jars. While sachets help mass user acquisition, Nescafe Gold, priced at a premium over Classic, serves the discerning consumer with a more prosperous and smoother experience.
Place – The strength of a Wide Distribution Network
Nestle’s well-oiled distribution network powers Nescafe. Having popular brands in the portfolio like Maggi & Kitkat supports the pull marketing strategy of Nescafe as retailers never want to be stocked out on products with high demand.
Out-of-home was always recognized as a critical alternate trade channel for Nescafe. Availability & visibility was ensured in educational institutions, railways, airlines, offices, food joints, and restaurants throughout the country.
Plenty of Consumption Zones like Café Nescafe, Coffee Corners, and multi-brand stalls were set up, and innovative vending machines were introduced. Product sampling was carried out at scale to acquire new users.
Conclusion
Both Nescafe & Bru are locked in a fierce battle for market leadership today, with each commanding about 36% market share (as per Euromonitor) by value in the Indian retail coffee market in 2020.
The lockdown also induced the purchase of more coffee equipment like grinders, pots & machines, providing a sales boost for fresh coffee. Monthly subscriptions of premium coffee are on the rise.
Nescafe should actively ride the premiumization wave due to the potential of artisanal coffee. Launching & marketing its globally popular machines like Nespresso & Dolce Gusto in India can be explored. Nescafe Café’s experiences can be further enhanced by opening a new line of Cafes in metros with a more premium appeal.
Let’s Stay Started!
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