Promotion and Price Analysis

The product chosen for its promotion campaign analysis is instant coffee Nescafe produced by Nestle. Before analyzing the promotion campaign, it is important to determine the target audience of Nescafe. 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:

Demographic characteristics:

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men and women from 20 to 45;

single/married/married with children;

elderly people who prefer decaffeinated coffee.

Economic: low, middle and premium segments;

Consumption habits:

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;

psychographical characteristics:

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)

As for Nescafe its 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.

2.Students who simply do not have coffee machines and prefer instantaneous coffee, which they can easily make at any given time.

Thus, we can see that Nescafe is aimed for younger audience as its core segment.   Targeting the younger audience as its core segment, 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. The slogan sounds like “Don’t let anyone prevent you from enjoying your favorite taste”. The company emphasizes both functional qualities of the product, as well as special feelings that it gives to the customers – pleasure, comfort, and the whole imaginary world that you want to enjoy over and over again. Nescafe is really aimed to be “Your favorite taste,” as another slogan states. Thus, we can see that Nescafe is professing more individualistic values.

However, Nescafe is still perceived as a caring, charming brand, though it gives self-confidence and assures good taste. People choose this brand as they trust its long-standing reputation and think this brand is very reliable. Moreover, it is quite affordable as well. Since it cares about people, Nescafe, as it was mentioned before, presents something for everybody – a wide range of choice from different type of product to different sizes and prices.

Having analyzed the positioning of Nescafe, it is easier to determine the key messages that are being delivered via different channels of communications. The first channel of communication is television with large-scale advertising. The key message that are 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. However, the TV with its ability to show the wide range of colors, sounds and images is also chosen to make people feel and understand the sophistication of Nescafe’s taste. It was already mentioned that Nescafe is positioned as a premium segment coffee (despite subbrand Nescafe classic). That is why it is crucial to transmit to the audience the very special qualities, the originality of the brand.

Thus, on of the original feature of Nescafe appears to be its sophistication, its elite taste. The commercial is trying to convey that if you drink Nescafe, it means that you belong to the chosen circle of people who have exceptional taste, namely elite.

The second channel of communication is Internet. 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. It has the description of all the existing types of Nescafe (subbrands), about the new products that appears in the product line. It also tells about the coffee as a physical substance, about its nutrition etc.

Thus, the main message that is being delivered via Internet (including Internet advertising) is that brand Nescafe is so diverse, that everyone can find something that suits him/her the best wether it is Necafe Colombie or Nescafe Gold. The message stimulates to try Nescafe and to match the desire with the available product brand.

Finally, the third channel of communication is publicity. The latter 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 evnts 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.

As for pricing, it is not dependent on the life cycle of the product. Coffee is a product with an extended life-cycle since the taste and the quality of it are unique, and the customers are usually loyal to the brand that can ensure the same quality taste over and over again. Therefore, the pricing of Nescafe is based upon its segmentation. Simply saying the premium segment brands such as Nescafe Gold, Nescafe cap Colombie, Nescafe Alta Rica cost more. They are aimed at elite target audience with more than average level of income.

Similarly, there is also an offer for the lower income level people who cannot afford buying premium segment products.  This offer is called Nescafe Classic, which is substantially cheaper than brands mentioned before. Thus, we see that Nescafe pricing strategy is more of a marketing tool that allows to cover more of a target audience. Yet, the key target audience for Nescafe still remains people with more than average income segment that can afford buying elite products.

In conclusion, it is important to say that Nescafe is aimed to embrace as big audience as possible. However, its primary focus is on younger people with middle and high income, who are self-confident, active and enjoy pleasure. The company positions its brand as the one giving tempting taste that you want to enjoy. Since the brand is designed to embrace wide circle of customers, the company uses differentiation while pricing the product, giving its customers the opportunity to choose from different types and sizes.

The key messages that Nescafe is trying to deliver depends on the channel of communication. yet, the main messages emphasize Nescafe’s exceptional taste, reliability of the brand and its peculiarity varying on the subbrand, so that everyone can find something that suits him/her best.

References

Applbaum K. “The Marketing Era” Routledge, New York, 2004
Brown S. “Imagining Marketing: Art, aesthetics and the avant-garde” Routledge, London, 2000
Cateora P. ”International Marketing”, 7th ed. Irwin, Homewood, IL, 1990
Laforet S. (1999) «Managing Brand Portfolios: Why Leaders Do What They Do” In Journal of Advertising Research, vol.39, p.23
Parsons A. (1996) “Nestle; The visions of local managers” In The McKinsey Quarterly, no.2, pp.21-22

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