Nescafe Chai Coffee Marketing Plan

MARKETING MANAGEMENT
TERM PROJECT
DATE OF SUBMISSION: 12-APRIL’2020
“NESCAFE CHAI COFFEE”
SUBMITTED TO: SIR ADNAN BASHIR

Group Members:
Asma Idrees (24084)
Bilal Qazi (24992)
Sana Saleem (24158)
Syed Saleh Muhammad Shah (24991)
Table of Contents
1.0 EXECCUTIVE SUMMARY 3
2.0 SITUATIONAL ANALYSIS 3
3.0 SITUATIONAL ANALYSIS 3
3.1 Market Summary 3
3.2 Strength, Weakness, Opportunities, and Threat Analysis 4
3.3 Objectives and Issues 5
3.4 Competitor’s Review 6

3.5 Product Review 7

3.6 Distribution 7

4.0 MARKETING STRATEGIES 8

4.1 Objectives 8
4.2 Target Market 8
4.3 Positioning 8
4.4 Strategies 8

4.5 Marketing Mix 9

4.6 Market Research 10

5.0 FINANCIALS 10

6.0 CONTROL 11

REFERENCES 11

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1.0 EXECUTIVE SUMMARY
Nestle Nescafe is preparing a new addition to their current product line of coffee. It would be a
unique fusion of coffee and tea, inspired from a milk coffee tea of Hong Kong, we have come up
with plan of this product as a new flavor of coffee. As Nescafe has a very strong brand image we
are targeting the tea market of Pakistan by launching this never heard beverage kind. Nestle Chai
Coffee will be made from premium quality Ceylon tea leaves. We are positioning our brand on
flavor of tea with the freshness of coffee. Our primary target for the first year is to capture 1% of
the tea market and grow our coffee market shares at least by 1%. As tea and coffee are the most
consumed beverages in Pakistan we are looking at the Product Development technique.

2.0 COMPANY OVERVIEW

Nescafe is a brand under the umbrella of the Nestle. It was originated in Brazil in 1930s as an
early example of innovation and sustainable development. Nestle strategy is, it aims to offer a
portfolio of products that revolve around the consumer needs, offer good nutrition and delight
the senses, contributing to healthier, balanced lives and healthier planet. Nestle tag line is “Good
food, Good life.” The value creation model of Nestle is based on balanced pursuit of resource,
efficient top and bottom line growth as well as improved capital efficiency.

3.0 SITUATIONAL ANALYSIS

Nescafe, a brand with strong roots is planning to launch a new type of coffee mix known as Chai
Coffee. Nestle leads the coffee market with 55% market share in coffee market with the only
competition being from coffee houses. The company has decided to target the tea market of
Pakistan. Tea is the favorite hot beverage of Pakistanis. It is a staple part of Pakistani culture and
thus substantial quantity of tea is consumed in this region.
Total Tea Market in Pakistan is 155,000 tons with organized market being of 85000 tons and
unorganized market being 70000 tons. Organized refers to branded tea whereas unorganized
refers to loose tea. The country recorded a 35% increase in tea consumption from 2007-2016 and
is currently 7th on the list of highest per capita tea consumption. Hence, the company has decided
to enter this market.
We plan to target the organized tea market. The competition in the organized tea market is very
high with existing established brands like TAPAL and UNILEVER occupying majority of the
market share. Nestle needs to specifically focus on its chosen segment in an effective and
creative way to attract its target audience.
3.1 MARKET SUMMARY
Nescafe Chai coffee market would consist of adults of the A and B+ class. The initial strategy
would be to target young adults of the age group of 18-35. Upon success of the product, later we
will move towards targeting middle-aged adults (ages 36-55 years), and older adults (aged older
than 55).

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 Target Customer Needs Corresponding Benefits
Segment

Adults  Accessible  Refreshment

(18-35 years old)  Consistent.  Keeps active throughout the day.
 Quality.  Improves energy levels.

Customer at  Looking for new  Easily available

Coffee Houses flavors of coffee.  Refreshing taste.
 Pocket friendly

3.2 STRENGTH, WEAKNESS, OPPORTUNITIES, AND THREAT ANALYSIS

In order to achieve all the useful information about the market strengths and weaknesses of
Nescafe, it uses SWOT Analysis to determine market analysis. By SWOT Analysis, Nescafe
aims to gather information about various factors of its existence that will improve the overall
quantity of the product and promote value for its consumers. In SWOT Analysis, the strengths
and weaknesses are the internal factors whereas opportunities and threats are the external factors.
Through SWOT Analysis, Nescafe benchmarks it business and performance with accordance to
industry and market. As of 2020, Nescafe is the leading brand in food and beverage industry.
Strengths: Any organizations strengths are its assets, capabilities, their consumers and their
market. Through these 4 things companies gain competitive advantage over other organizations.
Nescafe has the following strengths:
1. Nescafe has a very strong brand name and brand equity. It possesses a very strong
financial position and has huge availability of products. It has very strong brand
recognition. Whenever we think of coffee, we know its Nescafe. When we go to coffee
section, we ask for Nescafe. This is the strong branding of Nescafe. It has taken place and
penetrated into the market like India where it is the whole market of tea.
2. Nescafe has very strong promotions and advertising. They have very popular promotional
campaigns. They touch the strings of human heart very strongly through the
communication they do with their advertisements. They communicate and resonate with
daily problems of common people and has connected through audience with emotions.
3. Nescafe has positioned itself as the highest quality coffee at market prices and less than
market prices. The quality of Nescafe coffee beans, instant coffee has delighted
customers more than anything.
4. Nescafe has very diverse products. They have a wide range of flavors available. It has
diversity in terms of taste, strength of taste and types of coffee beans used. They have
large variety for every type of consumer.
5. All the consumers of Nescafe are their loyal customers so they have gained the loyalty of
consumers.
6. Chai Coffee will generate a huge profit for Nescafe as the tea lovers’ market will also
shift to this product if rightly positioned.
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 Weakness: On one hand, with a strong brand name, Nestle is also have weaknesses to look
at before launching any product.
1. The major weakness of Nescafe is that people are becoming more and more aware of
their health and becoming health-conscious so they avoid caffeine and Nescafe’s
ideology is totally based on caffeine although caffeine level gets differences based on
consumers preference but their products have caffeine must as it is all coffee.
2. The other weakness is that people are moving towards green tea, lemon tea etc. so this
maybe a weakness for Nescafe as well.
3. Their promotions don’t mention the difference of products and significance of every
product. Rather they promote Nescafe as a whole brand.
4. Usage rate is low in the countries like India where people love tea.
5. They haven’t mentioned the health benefits of coffee which maybe a weakness for them.
Opportunities:
1. They should increase the distribution channel in rural areas.
2. They can build Nescafe coffee houses because people are fonder of having a coffee at a
café with friends rather than at home.
3. They must target the people with old-age as well because the strategy of Nescafe is
instant coffee and products so old-age people can easily make it and can contribute to the
market.
4. They must target working people as well because they are busy and on the go so instant
coffee can be for them as well.
5. They can introduce hot chocolate coffee as well because it is trending very much.
6. They must make efforts to make people aware about the health benefits of coffee.
7. The tea market will expand for them as Chai Coffee will target tea market as well.
Threats:
1. They have direct competitors such as other coffee brands, coffee shops and cafes.
2. Their competitors offer low price than Nescafe which maybe a threat to them.
3. As Chai Coffee is mixed beverage so Nescafe have direct competitors of other tea brands
also.
3.3 OBJECTIVE AND ISSUES:
1. The objective of Nescafe’s product Chai Coffee is to target niche by targeting tea market
as well along with coffee market and joint market (tea and coffee) as well.
2. Nescafe aims to develop brand awareness through its new product innovation that is Chai
Coffee.
3. The main objective is to cater value to those customers who actually belong to tea market
and introduction of Chai Coffee is to provide spark to existing customers and a surprise
for our new customers.
4. To achieve more loyal customers and more market share by acquiring tea consumers also.

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 5. By associating tea with coffee, Nescafe aims to develop a point of difference in the
market by introducing a unique product to achieve unique selling point.
3.4 COMPETITION
The main competitors in the tea market are Unilever and Tapal having 43%, 41% market share
respectively. Their main brands are
 YELLOW LABEL
 SUPREME
 RED ROSE
 PEARL DUST
 BROOKE BOND

Market share
TetleyOthers
4% 6%
Tapal
Vital Tea 41%
6%

Unilever
43%

YELLOW LABEL and TAPAL TEA would be our direct competition as we are providing
premium tea.
 Tapal Tea Private Limited: Founded by Adam Ali Tapal in 1947. A pioneer in the
Danedar tea category, Tapal remains a favorite in Pakistan with its rich golden color and
strong taste being its most significant qualities. They are the first tea company to earn the
ISO-9001:2000 certification resulting from their brand loyalty and no compromise on
quality. Available in DANEDAR, GULBAHAR, SAFARI.
 Unilever Yellow Lable: Lipton was launched in Pakistan in 1948. A direct competitor of
TAPAL, Lipton estimates about 100 billion drinks are of their tea are consumed each
year. It is a household name in Pakistan. Quality and great taste are the key attributes of
Lipton Tea.

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 Refresh, reset, rethink and re-engage. This signifies that pausing and taking time out to
socialize with others over tea feels good and in doing so, it helps us feel good and bring
out the best in ourselves.
Lipton’s revitalizing taste is available in
1. Yellow Label leaf tea
2. Black Teabags and Green Teabags (Lemon, Mint, Jasmine, Plain)
3. 3. Mega DAANE

Figure 2: Sample of Competitive Pricing.

COMPETITOR BRAND PRICE

TAPAL DANEDAR 200G hard pack Rs.80rs
400G family pack Rs.155

UNILEVER LIPTON 200G Yellow Label Rs.95

YELLOW 500G Yellow Label Rs.235
LABEL

3.5 PRODUCT OFFERINGS

The core: Tea and coffee mix beverage (known as yin yang in Hong Kong)
Trade Name: Nescafe Chai Coffee
Brand Equity: Nescafe offers Premium Quality, Consistent and Accessible tea
Branding: Brown colored label of Nescafe signifies Strong taste, color and aroma of a premium
product.
3.6 DISTRIBUTION
NESCAFE Products are distributed through a network of retailers in the markets. Some of the
most significant channel partners are as below:
 Shops stores such as IMTIAZ, CHASEUP and NAHEED carry NESCAFE COFFEE in
Classic, standard 3 in one and Gold in jars, single stick pack.
.
 Online retailers such as daraz.pk and cart.pk have all kind Nescafe coffee in stock where
you can easily find all variations of the product
Our channel strategy will focus on delivering our new product to these existing partners
according to demand with suitable logistical support.

4.0 MARKETING STRATEGY

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Asia Pacific Tea Market was worth USD 16.23 billion in 2018 and estimated to be growing at a
CAGR of 6.1% to reach USD 21.83 billion by 2023. Nescafe, a leading market brand when it
comes to instant coffee. It holds around 56% of the market shares and has been a leading priority
of the consumer. This time being inspired from the traditional beverage of Hong Kong, Nescafe
brings you Chai Coffee, a traditional and one of the most famous drinks in the Hong Kong by the
name of Yuanyang. The marketing strategy for this product is focused on four major areas,
targeting the well-known coffee houses and restaurants, creating awareness through TV
commercials, free sample distribution with the Nescafe coffee, and getting it available on huge
retailers. In the upcoming session we will be elaborately discussing each strategy.
4.1 OBJECTIVES:
We have set the aggressive but achievable objectives for the first year of the market entry. As we
are coming up with a completely new product that has never seen before we are expecting
enthusiasm from the customer.
1. We are expecting to achieve 1% of the market share of the current tea market of Pakistan.
2. We are expecting to increase are 55% market share in the market of coffee by 2%.
4.2 TARGET MARKET:
We have positioned our brand as flavored coffee. The primary target audience for our product are
the coffee and tea lovers who are in search of new blends of flavor with the originality of the basic
component. For this we are targeting the coffee houses of the town, like Del Frio, Gloria Jeans etc.
The secondary market for this product are the individuals that are health conscious, who are in
search for the flavor that are satisfy their taste buds, and are good for their diet as well. As we are
using a leaf that is known for its health benefits.
4.3 POSTIONIG
It would first time introduced in Pakistan, a blend of tea and coffee in one pack. The promotion
tagline would be “taste of tea with the freshness of coffee”. The target market segment for this
product is the coffee lovers who are looking for the freshness of coffee with different flavors. The
premium quality tea leaves (Ceylon tea) and the premium quality coffee bean would be used in its
preparation. 1:1 ratio of both would be kept. It would be positioned as a tea flavored coffee.
Nescafe has a reputed brand image when it comes to coffee, and hence, launching the new product
as an addition to the existing product line would be an effective idea. Plus we are using Ceylon tea
leaves for the preparation of this. Ceylon tea has medical benefits as weight loss, healthy heart,
improved immune system, and helps in reducing the blood glucose level.
4.4: STRATEGY
 Product Strategy: The Nestle Chai Coffee, including all features described earlier will
be sold as a sample with the original bottles of Nestle. Nestle is a renowned brand with a
positive brand image, and hence taking benefit of this we are planning to launch the
product with the original color of Nescafe that is red and black but to differentiate it from
Nestle classic we will add a picture of green leaves and coffee beans to it. The idea for

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 the following year is to start with the small pocket friendly packages that would cost
Rs.20 each. The brand ambassador for Nestle Chai Coffee would remain same Mahira
Khan, as she is supposed to be a beauty icon and a health consciousness actress. Hence,
she will be a perfect match for the product. The brand would also be promoted with the
advertisement of the other Nescafe brands.
 Distribution Strategy: Our channel strategy to create brand awareness for this product is
giving samples for trials and feedbacks. We will make sure, that our product is available
at the small area shops as well as the large retailer like Chase Up, Naheed, etc. For the
support of the channel partners we will be providing them with the brand logo shelf that
would further highlight the brand. Furthermore, we will try to launch the product in
collaboration with the coffee houses and would offer them 20% of the sales.
 Marketing Communication: The launch of the product would be done through the
platform of the Nescafe Basement. The advertisement strategy for this would be an
opinion based advertisement. In this we would be asking the individuals to share their
opinion regarding the taste of the product. The advertisement main emphasis would be
the point of differentiation and a complete new fusion of flavors. To create a buzz in the
market we will be provide an offering. Buy a Nescafe Chai Coffee and get a chance to
meet your favorite celebrity. Before launching a product a hype can be created through
customer participation like share your ideas for new flavor of coffee, or guess what next
Nescafe will bring to you?
4.5 MARKETING MIX
We would start our action plan by the month of August because it tends to be late summer/fall
and start of early winters. That way more people would be drawn to our products because the
environment would be chilly and cold so it would be perfect to tease our new “Chai Coffee”.
August: A pre-hype of the product would be created before the product launch in
September. This pre-hype would be created through social media platforms. Customers
are always inquisitive about the new product. We will be asking customer to predict the
new flavor of coffee that Nescafe will be introducing through a campaign on Facebook,
and Instagram.
September: Launching of the product through Nescafe basement platform. We are
planning to distribute the free sample of the Nescafe Chai Coffee with the original
Nescafe bottles. Furthermore, we are looking forward to run a pilot study in the major
shopping malls like Dolmen Clifton, Dolmen Mall Tariq road, and ask individuals to
share their opinion regarding the beverage they had.
October: Advertisement campaign would be launched. It would be more of a public
opinion campaign. In stage 1 we have done a pilot study and asked people to share their
valued feedback. With the consent of the people we will be sharing those feedback
through our advertisement. In this month our main focus is aimed at creating awareness.
Advertisement would be run on channels like Ary Digital, Geo Kahani, etc.

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 November: We are introducing the Nescafe Chai and Coffee in the stick packs of Rs.20
each and the original bottles of Coffee of 100g for Rs.250 and bottle of 200g for 450. A
product shelf of Nescafe Chai Coffee would be placed in the big retailers like Imtiaz,
Naheed, and Aghas.
December: In this month we will shift our advertisement, and will make an
advertisement with the brand ambassador of Nescafe that is Mahira Khan. We would be
looking at active sales of product through introducing a campaign. “Buy and get a
chance to meet your favorite celebrity”
January: We would also use the thematic billboards on at least 10 heavily traffic loaded
spots of each of major cities of Pakistan. Furthermore, we would be looking at PR articles
in both magazines, newspapers, and bloggers.
4.6 MARKETING RESEARCH
A pilot study would be done before lounging the product to the market. Customers would be
given a cup of beverage to drink without telling what it is and would be ask to give their
feedback regarding the product. This will help us to further fine tune our brand before bringing it
to the market on a large scale. Furthermore, the company will keep a close eye on the market
sales of the product. Brand awareness research would help us to penetrate our product more
effectively and efficiently.

5.0 FINANCIALS
Total first year revenue for the Chai Coffee is projected to Rs.6,000,000 with an average whole
sale price of Rs.20 per stick pack, 250 per 100g and 450 per 200 g. The anticipated loss for first
year is Rs.1,200,000. The calculation for breakeven point indicates that chai coffee would
generate profit once it exceeds 300,000 unit sales of Rs.20 stick pack, 16,000 units of Rs.250 and
Rs.450 bottles. The fixed cost is estimated to be Rs.2,400,000 and variable cost is Rs.12 per stick
pack, 100 per 100g, and 200 per 200g
Break Even Point = FC/ (P-VC)
Break Even Unit Sales Calculation
Rs.20 Stick Pack Rs.300 100g Bottle Rs.550 200g Bottle
Fixed Cost (in Rupees) 2,400,000 2,400,000 2,400,000
Variable Cost (in Rupees) 12 100 200
Price (in Rupees) 20 250 450
Breakeven (unit sales) 300,000 16,000 16,000

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 Advertisement Budgeting Schedule
ARY Geo Dunya News Sama News
Time (pm) 8:00-10:00 8:00-10:00 8:00-10:00 7:30-9:00
Tariff Rate/min 91,000 89,000 75,000 85,000
No. of times ad would be played 5 5 5 3
Total Amount/min ad in one day. 455,000 445,000 375,000 255,000
Budgets for the advertisement

6.0 CONTROLS
The Chief Marketing Officer of the Nescafe would be keeping a close eye on the sales figures of
the products. Effective measures would be taken to make sure the reach the targeted sales. Or in
case of any problem it will help us to deviate for the marketing plans if needed. This would be
done through:
 Sales team visit at the outlet and retails and monitor sales.
 Effective measures would include a change in marketing strategy. Would increase the
customer exposure to the advertisement.
 Our sale figures would be compared with the sales figures of the competitors.
 Changes in strategy according to the consumer’s feedback collected in pilot study stage.

REFERENCES
 https://www.dawn.com/news/1415762/tea-consumption-up-in-pakistan
 http://tapaltea.com/
 https://www.unilever.pk/brands/our-brands/lipton.html
 https://chaseup.com.pk/nescafe
 https://www.daraz.pk/tea/tapal/
 https://www.daraz.pk/tea/lipton/
 https://www.marketdataforecast.com/market-reports/asia-pacific-tea-market
 https://www.statista.com/outlook/30010000/101/coffee/asia
 https://www.coursehero.com/file/p194knd/Nescafe-holds-a-majority-market-share-of-56-
in-the-instant-coffee-market-and-it/
 https://www.forbes.com/companies/nescafe/#e1e89c05854e
 https://www.thespruceeats.com/ceylon-tea-sri-lankan-tea-765685
 https://www.thespruceeats.com/hong-kong-milk-tea-recipe-766128

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 http://www.timenspacemedia.com/arydigital.php
 https://www.brandsynario.com/new-advertising-rates-for-pakistani-news-channels/

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