Customer Analysis

Coffee has mainly been perceived as elite product targeting the echelons of SEC A and A+ and a
target group between the ages of 18 to 40. The target group for Nescafe has traditionally been
the youth, with people studying in universities the main target. This has been constantly shown
by the previous advertisements of Nescafe and the various price points of different SKUs that
Nescafe has.

There has been a strategic shift in mindset at Nestle with the product now being targeted towards
the masses. Theres a shift from it being an indulgence product to becoming an everyday product.
So now the customer has shifted from the young trendy kids/adults to everyone. The target
market for Nescafe is now the same as that of tea. Its very hard to define the TG of tea, everyone
drinks it from a 6 year old kid to a 70 year old uncle. Nescafe wants to penetrate in to the tea
drinking segment.

Positioning

Previously the brand had positioned itself as an indulgence product by focusing on university
kids, music and building moments. Keeping in mind the strategic shift, the product is now being
positioned for everyone. The focus has shifted away from Nescafe being an indulgence product
towards Nescafe being an everyday product. The positioning of the product now focuses on
functionality rather than emotional appeals. The product is being targeted towards those who
consume tea as their first drink of the morning. The idea behind using a functional appeal is to
make the customer aware that coffee does a better job of waking you up rather than tea. This can
be seen in their new TVC in which they show people from different walks of lives and how
someone comes up to them and serves them Nescafe. The people in the ads belong to lower SEC
classes than what has previously been used. The ad demonstrates its functional benefit by show
casing the revitalization of your body or how refreshed you feel after youve been up all night by
consuming Nescafe instead of tea in the morning.

In order to strengthen this repositioning the brand has also focused on developing SKUs which
appeal to everyone. The price point of the 3 in 1 SKU was also reduced from Rs. 30 to 20 in
order to make it more accessible to the general public. While at the same time the packaging was
also changed to give it a look of being an everyday persons product. Another important thing
that changed with repositioning was that they introduced these small SKUs strips that they
started to place at Kiryana stores as well as corner shops to make it more accessible for the
public.

Internally as well the brand was shifted towards PPP (popularly positioned portfolio). In PPP you
tend to introduce smaller SKUs in order to make the product more affordable and relatable with
the masses. Previously the PPP mind set wasnt associated with coffee. It was attached with
brands such as Nestle Bunyad, Cerelac and EveryDay. But now that has changed, its now being
repositioned towards the masses with a focus on coffee being the first cup of the day.